Sumus eyes midlands
Article Date: Nov 07 2006Allan Rosengran, boss of independent financial adviser (IFA) network provider Sumus, is looking for a new acquisition in the Midlands.
Bristol-based Sumus, which raised £2.5 million at 40p with its AIM float early last year, is the holding company for the Falcon Group, with 150 IFAs, 65,000 clients, annual turnover of more than £15 million and £1.3 billion of assets 'under advice'. In July, Sumus acquired Financial Services Advice and Support (FSAS), a leading Scottish IFA network, for up to £2 million in cash and shares in a deal which added another 160 IFAs, £10 million-plus turnover and £700 million assets.
Now, says Rosengran, the company, which increased pre-tax profits 31 per cent to £393,000 in the half year to March on turnover up 35 per cent to £7 million, hopes to link its northern and southern coverage with the acquisition of a Midlands network. 'We have £4 million cash', he points out, adding that he reckons the sector is ripe for consolidation, with larger groupings better placed to raise the capital required by regulators, establish client-friendly brand images and obtain better deals on IT and professional indemnity insurance.
With an enviably long record of turnover and profits growth and run by an experienced and stable management team, Sumus's profits, return on capital and operating margins compare favourably with the competition. FSAS, Falcon and another Sumus division, Financial Synergies, joined forces a year ago with PI Financial in the Midlands to launch the IFA Consortium, combining 500 advisers in larger IFA groups, with a combined turnover of £40 million.
At 35.5p, valuing the company at £10 million, Sumus's shares could well outperform the sector.
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