Racing ahead of forecasts: our fair value rises
AUM closed FY21 on £9.0bn (+35% y-o-y from £6.7bn) with Tatton reaching this milestone a year ahead of our previous forecasts. A strong investment performance was the largest contributor to AUM growth (+£1.5bn), but the inflow of new client money was also strong (+£0.8bn) and accelerating, with average monthly inflows in H2 of £71m compared to £55m in H1. Net cash increased 32% from £12.8m to £16.9m, also well ahead of our forecast (£16.4m).Tatton’s longer term growth trajectory remains firmly in place, and we think it is realistic that AUM reaches £15bn by 2025 through organic growth. Our fundamental valuation increases to 395p and we flag that Tatton’s PER of 25.4 is undemanding compared to peers (median 27.3), despite it being a top quartile performer when it comes to attracting net AUM inflows.
Tatton Asset Management is engaged in providing a range of services to the Financial Conduct Authority ("FCA") directly authorized financial adviser ("DA IFA") marketplace encompassing discretionary fund management, regulatory and compliance services and mortgage services. Co.'s discretionary portfolio management ("DFM") service operates on ten United Kingdom adviser WRAP platforms and can be integrated into the growing number of adviser WRAP platforms in the market. Co. provides support services to independent financial advisors ("IFA"s), enabling DA IFA firms to provide compliant and effective investment portfolio management for their platform based clients.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
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