Fairstone Group has confirmed that it shows no signs of stopping its very active M&A strategy.
The UK financial planning company said in its 2020 financial results that it is in “active discussions” with over 45 firms to join its downstream buy out (DBO) programme.
The programme continues to be a core driver of growth for the business, reversing the traditional buy and build approach, with consolidation playing a key role in a firm joining the programme.
The scheme integrates advice businesses into the group within a two-year period.
Some 10 firms joined the DBO programme in 2020 with a view to full acquisition within the next two years. There were also 10 completed acquisitions in 2020.
Fairstone chief executive Lee Hartley said: “A combination of organic growth and the success of our proprietary DBO acquisition model, is continuing to deliver exceptional results and to drive growth, with a series of deals with partner firms being completed at various stages within the financial year.
“Our uncapped long-term capital resources and new shareholders who have a shared long-term outlook, further underpins and accelerates our ambitious acquisition programme.”
Results
The announcement comes as Fairstone reported a 32% increase in funds under management to £10.7bn ($14.5bn, €12.6bn) in its annual results to December 2020.
Recurring income increased to £49.3m, up from £41.5m in 2019.
Total revenue for the 2020 financial year grew by 8%, to £69.7m, representing an increase of £5.3m, with adjusted Ebitda showing a profit of £5.4m.
Meanwhile the number of wealth clients during this period has risen by 18% to more than 40,200 from just over 34,000.
Hartley added: “In 2020, against the backdrop of the global pandemic, we again delivered strong progress across all areas of the business and the group continues to make excellent progress against its core strategy and growth plan.
“From an acquisition perspective, the year was very heavily back-end loaded as the effect of a national lockdown delayed a large amount of our due diligence programme.
“I’m delighted to say that every single deal we aimed to complete in 2020 was concluded, although naturally these were later than planned. Ultimately this means our profits for the full-year are quite heavily understated when compared to the steady-state performance.”
