Mercia Asset Management PLC on Tuesday reported strong first-half results, with growth in revenue and assets under management despite ongoing challenges in the broader economic environment.
The alternative asset manager, which focuses on regional UK small and medium enterprises, said assets under management rose 26% to £1.84 billion at its September 30 half-year end, up from £1.46 billion a year earlier.
Revenue increased by 19% to £17.9 million from £15.0 million, while earnings before interest, taxes, depreciation, and amortisation climbed 34% to £3.7 million from £2.8 million.
Pretax profit surged 71% to £2.4 million, compared to £1.4 million in the same period last year.
However, net asset value per share slipped 4.2% to 43.4 pence from 45.3 pence.
The company declared an interim dividend of 0.37p, up 5.7% from 0.35p a year ago.
Chief Executive Officer Mark Payton said: ‘Mercia has delivered another strong first half performance with our higher funds under management driving revenue and Ebitda growth. I am pleased to say that none of the tax changes announced in the government’s autumn budget will curtail Mercia’s growth ambitions.’
Mercia raised £57 million for its managed funds during the period, including £29.2 million for its Northern Venture Capital Trusts and £10 million for the Northern Powerhouse Investment Fund. Its direct investment portfolio decreased 16% in value to £120.9 million from £143.5 million a year ago.
Post-period end, the company closed an additional £4 million in Enterprise Investment Scheme funding and realized £600,000 from the sale of Artesian Solutions, 11% above its previous valuation on September 30.
The company said it continues to focus on its strategic plan, Mercia 27, which targets doubling Ebitda and scaling assets under management to £3 billion within three years. The company said its diversified investment strategy and significant liquidity of £663 million position it well to navigate market challenges and seize new opportunities.
Mercia noted that while inflation and interest rates are moving in a ‘favourable’ direction and political uncertainty in the UK has eased after the autumn budget, risk tolerance within the business and funding communities remains low, particularly for small and medium enterprises. Despite these headwinds, the company highlighted the ‘resilience’ of SMEs, including its portfolio companies, which ‘continue to adapt and make steady progress’.
Shares in Mercia were down 1.1% at 30.66 pence each on Wednesday afternoon in London.
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