The UK wealth manager Ashcourt Rowan, has secured a deal to buy rival firm UK Wealth Management, and announced profits of £0.9 million for the six months ended 30 September 2013.

The UK wealth manager Ashcourt Rowan, has secured a deal to buy rival firm UK Wealth Management, and announced profits of £900,000 ($1.47 million) - double the size of last year's £0.4 million - for the six months ended 30 September 2013, the group said in a statement.

In addition to its underlying pre-tax profits, the group also recorded total assets under management at £3.7 billion, of which £1.6 billion are discretionary or managed assets.

The positive results are in part due to the significant cost savings achieved by the firm over the year’s first six months, bringing its operating cost base down 6.5 per cent to £14.3 million.

This is despite the fact that the six-monthly results also revealed a significant loss of £2.5 million before tax, driven primarily by planned costs to complete the firm’s new change management programme.

“During this first half Ashcourt Rowan successfully completed its change management programme and is now prepared for a period of both organic and acquisitive growth,” said chief executive Jonathan Polin.

This growth will in part be fostered by the recently acquired Generali Portfolio Management’s UK business, which, along with other initiatives, is expected to provide additional asset inflows of more than £300 million in H2.

Acquisition expands business significantly

More importantly, Ashcourt Rowan also announced that it has entered into a conditional share purchase agreement with Duke Street General Partner and certain Duke Street funds, to acquire UKWM for up to £14.25 million in cash.

As at 31 October 2013, UKWM had £1.3 billion in assets under management, with annualised revenues of £8.8 million of which £6.6 million were recurring.

The deal will expand Ashcourt Rowan’s combined assets under management to more than £5 billion, with discretionary assets in excess of £2.1 billion.

“UKWM's business is complementary in terms of culture, outlook, client base and office footprint, adding locations in the North of England where Ashcourt Rowan was previously under-represented,” said Polin and added that the deal will bring the firm’s number of employees to 77 financial planning and corporate advisors.

“Our stated aim has been to have a separate division for corporate solutions to support the work we are currently undertaking in auto-enrolment. In acquiring UKWM we extend our group with specialist individuals who have the expertise tools and resources to concentrate on the delivery of solutions to the corporate SME market,” added Polin.

The acquisition, which is subject to regulatory approval from the FCA, will increase the group’s national footprint so it now has a network of 17 offices across England and Scotland. Cantor Fitzgerald Europe is acting as sole financial advisor on the deal.