AFH cuts dividend in response to coronavirus

In its interim results for the six months ending 30 April 2020, published on Monday (1 June), AFH said that, while the group was "resilient", it was not immune to uncertainty as a result of Covid-19 and its impact on the firm and its clients going forward. As a result, it decided to cut the second interim dividend by two pence per share.

The group said it will consider paying an additional two pence per share as a third interim dividend at such as time when "the financial and economic effects of Covid-19 become clearer", adding the move means the firm is able to protect clients and a handle any new circumstances as they arise.  

The new dividend will be paid to shareholders on 3 July 2020. The group's results also suggested it had managed to largely withstand the negative effects of the coronavirus so far.

Its profits after tax maintained at £4.6m, up slightly from H1 2019's £4.5m, while its revenues were up 5% to £38.2m.

Income from financial planning fees fell slightly from H1 2019 to £7.1m, down £0.4m over the same period last year, but annualised average revenue per adviser in its core business increased to £258,000, up from £236,000 last year.

The company remained optimistic about financial advice in the future, suggesting Covid-19 could provide ample opportunity for financial planners. It said: "We expect a growing requirement for professional financial planning amongst the mass affluent, many of whom have not sought professional advice to date, and the board therefore believes that the company is well positioned to benefit from the medium and long-term requirements of this demographic."  

CEO Alan Hudson (pictured) said: "Throughout the ongoing crisis, our efforts have been focused on protecting the health, safety and wellbeing of our employees and their families, while continuing to deliver the same high level of service to clients and maintaining long-term value creation for shareholders.

"The company adapted quickly to the challenges presented in March and, by the end of the month, had over 400 staff and all advisers working from home with full access to AFH's web-based infrastructure, which has been the focus of significant investment since 2015."

He added: "Under the ongoing restrictions and uncertainty in the financial markets, the board expects that while gross revenue for the current year will be lower than market expectations this will be largely offset by the variable nature of the group's cost of sales and cost reductions implemented by the company."

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