Financial statements completed for the 2021 financial year highlight a 22% increase in revenue, up to £84.8m, a 21% increase in funds under management to £13 billion and a 19% increase in recurring income to £62.2m. Repeating income, which encapsulates all revenues generated from existing clients, stood at 92% of turnover.
Adjusted EBITDA at the end of 2021 also shows a profit of £12.8m, while fully embedded EBITDA, which includes all partner firms currently undergoing integration, stood at £25m.
Meanwhile Fairstone’s organic growth has accelerated, with a 12.6% rise in wealth clients and a 16% rise in transactional clients during 2021.
“Combining our acquisitive success with organic growth has delivered considerable year-on-year growth, with revenue and gross margin significantly ahead of the prior year.
“The double-digit growth and solid performance across the key metrics of the business was further bolstered by Fairstone completing a market-leading transaction with global private equity house TA Associates in 2021, with private equity backers Synova also reinvesting and funders Alcentra increasing the scale of acquisition facilities available.
“Against this backdrop, we once again delivered strong progress across the business, making excellent headway against our strategic growth plan, as well as continuing to provide the highest level of service to our clients, which is borne out in our 93% client retention rate.
“Combined this reinforces that the business is resilient, underpinned by a strong client base and a solid financial foundation to drive growth and accelerate our ambitious acquisition programme.
“The group’s vision is clear; to be the leader in the whole-of-market advisory space. Our considered approach, together with our proven business model and the significant financial backing that we have at our disposal, allows the management team and shareholders to look ahead to the future in a very positive manner.”
In addition to eight completed acquisitions, 10 firms joined the Downstream Buy Out (DBO) programme in 2021 with a view to full acquisition within the next two years, and interest in the buy-out proposition is high across the sector, with further active conversations with business owners.
Latest earn out data released by Fairstone reveals that on average the firms that have joined Fairstone under the DBO proposition have banked 116% of their initial sale value, some a great deal more, and most importantly, none have received less than 100%.
Fairstone is one of the UK’s fastest growing financial services organisations and incorporates one of the UK’s largest Chartered financial planning firms. Headquartered in Newcastle with more than 1,000 people across 40 UK-wide locations, Fairstone is the number one ranked wealth management firm on Trustpilot and oversees £13.5 Billion FUM for over 50,000 wealth clients and 40,000 mortgage clients.
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EBITDA – earnings before interest, tax, amortisation, depreciation, share options and exceptional items.