Oberon Investments Group plc (AQSE: OBE), the boutique investment management, wealth planning and corporate broking group, has announced its results for the year ended 31 March 2022.
Highlights
| · Funds under Management and Administration (‘FUMA’) increased 80% to in excess of £1bn (2021: £550m) |
| · Revenue increased 75% to £6.7m (2021: £3.8m) with growth across all divisions |
| · EBITDA loss reduced by 63% to £236,118 (2021: £632,757) |
| · Completed acquisition of wealth planning and financial advisory firm Smythe House, further increasing and diversifying Oberon’s offering to clients |
| · Oversubscribed fundraise of £3.4m in March 2022 |
| · Oberon Capital continued growth, receiving Corporate Advisor status on Aquis, completing its first two IPOs and increasing the number of retained clients to 13 (2021: 3) |
| · Considerable capital investment made in, (i) new client technology platform, (ii) operational investment in compliance tech systems, and (iii) investment in new personnel and support |
Simon McGivern, CEO of Oberon Investments Group, commented: “We are pleased to report another year of strong growth across all divisions. The results reflect the hard work of all our teams and, most pleasingly, the vast majority of this growth is organic, demonstrating the increasingly attractive product and services that we are offering our clients.
“Our investment in systems and operations has given us a strong foundation to continue and control our growth in the coming years. Oberon Capital continues to selectively choose opportunities, and having integrated the team at Smythe House, we are now rolling out its wealth planning services to our client base and beyond. In 2022, we aim to launch new services and products, such as the Oberon EIS fund and Inheritance Tax Portfolio service.
“We will continue to consider various acquisitions, both of teams and companies. While the current markets and macro-economic conditions are demanding, the Board is focussed on picking opportunities, controlling costs and seeking both organic and acquisitive growth for the next 12 months and beyond.”
Oberon Investments Group operates in the UK wealth and fund management sector and in the corporate broking and financial advisory sectors. Since Oberon Investments Ltd was established in April 2017, Oberon group’s FUMA have grown to in excess of £1 billion. This has been achieved organically by adding new clients and new fund managers, attracted by the emerging brand and by a number of small, selective and accretive acquisitions. Oberon Capital, the corporate broking division, launched in June 2020, provides advice and raises capital for companies from seed and early-stage funding through to IPO and beyond.
CHAIRMAN’S STATEMENT
I am pleased to announce another strong year of organic growth with revenues increasing from £3.8m in 2021 to £6.7m in 2022. Funds under Management and Administration (‘FUMA’) grew from just over £550m in March 2021 to in excess of £1bn at the end of March 2022.
At the beginning of the financial year, the acquisition of Smythe House was completed, adding another suite of services to our Wealth Management division. The Oberon Capital division carried out its first two IPOs, as well as attaining Corporate Advisor status on Aquis. A successful fundraising, which was well oversubscribed, was carried out at the end of the financial year, raising £3.4m, further strengthening the Group’s balance sheet.
This was also a year of significant capital investment. Throughout the year, we made a conscious decision to invest in the infrastructure of the group, most notably in the implementation of a new technology platform for our clients which launched in Q1 of 2022. This is already improving our clients’ experience with Oberon whilst also enabling management to monitor and manage operations more efficiently. We continue to look at further technology-led solutions to improve our client offering and experience as the company grows.
We also invested considerably in the operational infrastructure of Oberon, most notably in our compliance and risk management functions, both in personnel and technology, to create a robust foundation for future growth. A new compliance-technology platform was launched and a number of senior personnel have been added to the risk and compliance team. We feel that a strong foundation has now been built, upon which we can continue to grow.
A financial summary for the group for the year to 31 March 2022 is shown in the table below, reflecting 10 months contribution from Smythe House which was acquired on 27 May 2021. The results reflect a significant improvement in the performance of the Group on both the fund management and the corporate broking division as well as an encouraging initial performance from Smythe House Limited.
Consolidated Financial Summary
| Year ended31 Mar’22£’000 | Year ended31 Mar’22£’000 | |
| Turnover | 6,726 | 3,838 |
| Other income | – | 23 |
| Administrative expenses | (7,496) | (4,782) |
| Gain on value of investments | 212 | 75 |
| EBITDA | (236) | (633) |
| Operating loss before acquisition related expenses | (558) | (846) |
It would be remiss to not mention the current difficulties being felt across the capital markets. The executive team are focused on controlling costs, while at the same time looking at further opportunities that might present themselves from the market fallout. We continue to offer an attractive home for teams and clients and have the ability to move quickly when corporate opportunities arise.
The exciting results and growth as described by this report would not be possible without the dedication and skills of our specialist teams. They have continued to demonstrate resilience in the face of the covid-related challenges that beset the year and our thanks goes to them for delivering such impressive growth for the Oberon Group shareholders.
Hon Alex Hambro
Chairman
27 July 2022
CHIEF EXECUTIVE’S REPORT
The year under review in this annual report continued the transformation of Oberon following the listing of the business in February 2021. This significantly enhanced the group’s profile, gave Oberon access to the capital markets, and gives staff the ability to participate in share incentive schemes, which should enhance our ability to attract new fund management teams to the business. We acquired a strategically important business in Smythe House in May 2021, which opens the opportunity to expand their services to our existing clients. These areas of development have also been supported by our corporate finance division which grew revenues through during the year through various fundraises; it also increased the number of corporate clients it provides advice to under recurring retainers.
Review of the business
Within the group, the main operating company, Oberon Investments Limited (‘OIL’), has continued to restructure many elements of the business which was acquired in 2017. This includes areas to support future growth, including infrastructure, new IT systems, new personnel and staff training. This consistent investment approach has helped generate revenue growth for the group of over 75% during the year to 31 March 2022 to £6,726k (2021: £3,861k).
This increase in revenues has been generated both through the development of Oberon Capital, our corporate finance division, as well as strong growth in our fund management business which has seen FUMA grow from c.£550m at 31 March 2021 to over £1bn at 31 March 2022. Although a lot of this work has been completed, there are still further investment opportunities to grow the business both organically and through acquisition.
Because of the increase in costs associated with the investments mentioned above, the business made an EBITDA loss (excluding share based charges) of £236,118 in the year to 31 March 2022 compared to a loss of £632,757 in the year to 31 March 2021.
Growth Strategy and Business Model
The Board is firmly committed to grow the business by acquiring the right businesses and teams that will thrive under the Group’s ownership and entrepreneurial culture. Additionally, it is the intention of the directors that the Group will launch new funds and wealth management solutions to enhance organic growth rates and by adding services where we can take advantage of experienced practitioners, as evidenced by new appointments in Oberon Capital. In addition, the acquisition of Smythe House, a well-regarded independent financial advisor, will lead to further opportunities and enable us to offer Smythe House’s advisory services to some of Oberon’s existing clients.
Outlook and Prospects
We anticipate the company will continue to grow this year, not least given the pipeline of potential deals in the Oberon Capital division. In addition, the directors believe that the company is in a strong position to attract new clients and teams to the fund management business.
Oberon has demonstrated strong revenue growth since inception, building a robust infrastructure over the period to manage this growth. Market conditions are clearly difficult due to the macro-economic climate and we expect this to remain so for the foreseeable future. Following the successful fundraise in March 2022, Oberon goes into the new financial year in a strong position, with the executive team focused on managing costs, alongside our strategy of sustainable growth. We feel that the potential fallout in the capital markets could provide opportunities for Oberon, as teams and clients look for a new home. We also feel that Oberon is in a position to benefit greatly from a recovery in markets.
Oberon is a compelling proposition for fund management teams looking for a new home, as well as for clients looking for a tailored of portfolio of services. We are developing a number of new products, such as our EIS and IHT fund business, which should help generate further revenue streams in the coming year.
Oberon Capital is in an increasingly strong position to service our clients as they look for a dedicated boutique operation to advise and help them. We have a team of experienced professionals in place who can execute our strategy and bring extensive experience in corporate broking. All are teams are very ably backed by strong compliance, finance and back-office functions, with improved IT and Management Information systems.
In order to capitalise upon the opportunities available to Oberon, the directors will continue to look closely at acquiring good quality fund management teams and businesses when they arise. We believe that our strategy will result in the business being well placed to meet our growth expectations for the year ahead.
On a final note, I would like to take the opportunity to thank our shareholders for their continued support, particularly in the most recent fundraise.
Simon McGivern
Chief Executive
27 July 2022
