South Tyneside financial services firm Fairstone Group is toasting double-digit growth following a year in which it made 18 acquisitions.
Consolidated accounts for the Boldon company, which now employs more than 1,000 people across 40 bases, show a 22% increase in revenue in 2021, up to £84.8m, as well as a 21% increase in funds under management to £13bn. It also reported 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 showed a profit of £12.8m, while fully embedded Ebitda, which includes all partner firms currently undergoing integration, stood at £25m. Fairstone also saw a 12.6% rise in wealth clients and a 16% rise in transactional clients during 2021.
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Separate accounts filed on Companies House for Fairstone Group Ltd – the holding company and management and support service provider to its subsidiaries – showed revenues rose in 2021 from £11.1m to £14.9m, also converting the previous year’s loss of £500,000 to profit of £300,000. Pre tax profit, meanwhile, rose from £800,000 to £1.1m.
Fairstone CEO Lee Hartley said: “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 98% 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.”
As well as completing eight acquisitions, 10 firms joined the group’s Downstream Buy Out (DBO) programme in the period, with a view to full acquisition within the next two years. It said that 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 and none have received less than 100%.
