Revenues jump at Midlands asset management company Mercia

Photo shows: Mark Payton, Mercia Asset management
Mercia Asset Management Mark Payton

Mercia Asset Management PLCthe Henley in Arden-based regional asset manager saw revenues jump by more than 50 per cent to £8.4 million over the last six months.

Total assets under management increased by 78 per cent compared to 30 September 2019 to around £872 million.

Profit after tax rose to £8.2million, from £2.1 million.

Mark Payton, Chief Executive Officer of Mercia, said: “These record results mark the halfway point in our three-year strategic plan to achieve adjusted operating profitability, expand the Group’s assets under management to at least £1 billion and to ‘evergreen’ Mercia’s balance sheet. I am pleased to say that strong progress has been made during the six month period under review.

“We have successfully built scale in our third-party fund management business and the fees this is generating are enabling us to deliver a sustainable adjusted operating profit, in turn underpinning our maiden interim dividend and the adoption of a progressive dividend policy.

“Our total assets under management have now increased to around £872million, £722million of which is third-party funds under management, and we remain confident in achieving our target of £1 billion in total asset under management within the next 18 months.

“I am also pleased with the positive steps we are making towards ‘evergreening’ our balance sheet. We delivered a profitable cash realisation during the period and another post period end. Furthermore, our direct investment portfolio is well financed and we have considerable remaining liquidity. In addition, it is encouraging that we have reported a strong net fair value increase, reversing some of the COVID-19 impact we reported in our full year 2020 results. We are increasingly optimistic about the potential of the companies within our direct investment portfolio, many of which are in sectors such as Life Sciences, Software and Digital Entertainment which are experiencing strong tailwinds.”

He added: “Whilst this continuing period of uncertainty during the COVID-19 pandemic has adversely affected many UK businesses, the resilience of Mercia’s hybrid investment model, which connects third-party managed funds and direct investment activity via our proprietary capital, positions us favourably as we move into the next half year and thereafter.

In July Mercia sold Oxford-based The Native Antigen Company for £18 million. The sale realised total cash receipts during the period of £4.8million and a realised gain of £1.7million.