Gresham House plc (LON:GHE) Chief Executive Officer Tony Dalwood caught up with DirectorsTalk for an exclusive interview to discuss their interim results, delivering on strategy, pipeline growth and what to expect from the remainder of 2018.
Q1: Tony, what are the main takeaways from the Gresham House interim results?
A1: Very pleased with the interim results this year, 2018. It’s shows a number of things, particularly continued momentum, operational performance as well as growth organically and through acquisition.
How that’s been shown, the financial returns are coming through, our targets are being met mainly things like we now have £1.6 billion of assets under management, we hit an exceeded profitability which is, again, another milestone we set ourselves a while back. Other areas and financial metrics will include our revenue targets and the fact that we have a very strong balance sheet. We have substantial cash, £17/£18 million of cash plus liquid assets totalling over £30 million so, again, that positions us in a really positive way.
Other takeaways include the fact that the acquisitions we made over the last 12 months were capturing the synergies we outlined in advanced of the acquisitions and that value is, again, something we value and believe is precious as we generate shareholder value going forward. Another aspect is the fact we’re recruiting and bringing in quality people into the group now, that bodes well for the long-term and sustainable growth of this business.
So, really, all-in-all GHE is increasingly becoming a significant alternative asset management business so we’re very pleased with that.
Q2: How is the strategy delivering on its objectives to deliver shareholder value?
A2: We’ve set some very clear financial metrics in terms of shareholder value.
One is the return on capital when we use our balance sheet and that needs to exceed 15% and we’ve shown that our acquisitions and deployment of capital to date is hitting that which is really pleasing in the medium term.
Secondly, operation margin targets, we’re on track to target over 40% margins in the medium to longer term and that’s a crucial area to generate operational gearing in this business.
That would lead eventually, and we would expect to a decent shareholder value and that we can see that coming through in terms of others recognising the vision and our objectives here. We’ve had new shareholders come on board in this business in the last 6-12 months, both institutional high net-worth’s but also wealth managers as well.
Q3: What can we expect for the rest of 2018 from Gresham House plc and what is the pipeline for growth?
A3: The focus on organic growth is very important. We’re integrating FIM and Hazel Capital which we continue to do and that’s creating some good momentum. We have clear organic growth plans from our existing products, the British Strategic Fund, forestry, solar and increasingly from areas that we’ve highlighted that we have expertise in like energy storage systems, batteries, which we’re quite excited about actually.
The focus, as I say, is organic but we have been positive and constructive in our opportunistic approach to acquisitions. So, whilst we are focussed on delivering growth in our existing 5 asset management areas, we will always look where we can capture some value from further acquisitions although that isn’t necessarily our focus at the moment.
So, all-in-all, for the remainder 2018, we’re quite positive around the momentum that’s in the business.
Gresham House plc (LON:GHE) is a specialist alternative asset manager providing funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies.
