Jelf Financial Planning is seeking shareholder approval to buy back 10 per cent of the company’s shares as well as seeking a waiver from shareholders on the requirement for major shareholder Capital Z to make a bid for the firm if its shareholding rises above 30 per cent.
Capital Z currently has a 29 per cent stake in the firm. Shareholders will be asked to vote on the two proposals at a general meeting on 21 February.
The Jelf board of directors currently owns around 6 per cent of the firm. The board says it wants to increase its share because of a reduction in market liquidity.
The firm’s financial planning arm reported earning before interest, taxes, depreciation amortisation and exceptional items of £294,000 for the year ended 30 September 2012 , an increase on the £18,000 figure reported for the previous year. The firm’s financial planning arm has around 30 advisers.
Revenue for the financial planning arm fell 5 per cent to £7.1m from £7.5m in 2011. Jelf currently has around £490m in funds under advice placed on wrap platforms compared to £450m in the previous year.
EBITDAE for the group as a whole reached £11.3m, an increase of 11 per cent compared to £10.1m in 2011.
Jelf says it has also put in place a new debt facility to aid with acquisitions.
Jelf non-executive chairman Les Owen says: “The last 12 months have been challenging as the hoped for signs of an upturn in the economy have not so far materialised, our clients have continued to face difficult trading conditions, and our marketing remain intensely competitive.
“It is pleasing therefore that we have continued to grow our business, strengthen our balance sheet and position ourselves for further profitable growth when marketing conditions do improve.”
PMI Independent Financial Advisers director John Stewart says: “On one hand you could say that it is a positive move if they are looking to get a bit of control in order to make acquisitions. On the other I would be suspicioius as to whether the board has the best interests of its shareholders at heart.”