Alpha FMC proves resilient business model as it plans to double in size

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What it does

Alpha Financial Markets Consulting PLC (LON:AFM) is a global provider of specialist consultancy services to the asset and wealth management industry. 

It has over 430 consultants across twelve offices spanning the UK, Europe, North America and Asia.

The AIM-listed firm has provided consultancy services to over 400 clients, including 85% of the 20 largest global asset managers by AUM and a range of other buy-side firms. 

 

How it is doing

In April, Alpha said that underlying profits for the year to March will be at the upper end of market forecasts after trading improved steadily during the second half.

The group ended the year with approximately £34m of cash balances and an undrawn £20m loan facility.

It said it continues to make good progress, to enjoy a healthy new business pipeline and to deliver good levels of new business wins across its geographies. 

 

What the boss says: Euan Fraser, global chief executive

“Whilst the COVID-19 situation is ongoing, the financial year ends with strong trading across our markets and with a good new business pipeline.” 

“We remain positive that the medium-term underlying industry trends of cost reduction, increasing regulation and growth in assets under management, will continue to drive ongoing change programmes globally for which Alpha’s expanding range of quality consulting services is well placed to advise and best assist our clients’ needs. With a clear strategy focused on long-term high-quality growth markets the group is well-positioned to make further progress.” 

 

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What the broker says

In April, Berenberg said Alpha has been materially more resilient than expected and looks set to deliver another year of double-digit top-line growth and high cash generation.

Analysts added that they expect many more upgrades to forecasts over the next few years as Alpha plans to double in size.

“We believe these results are an excellent example of the essential nature of Alpha’s services to its clients and a greater level of resilience than even we had expected,” they noted.

The German bank holds a ‘buy’ stance with a 310p target price.

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