Rohan Mead
Australian Unity has reported a 54 per cent increase in after tax profit for the 2006 financial year.
The mutual achieved a profit of $23.8 million on revenues of $614 million for the 12 months.
Australian Unity group managing director Rohan Mead said he was happy with the solid result, with all parts of the company delivering stronger performances.
“We are well placed with headline improvements in our three areas of healthcare, financial services and retirement,” he said.
“The operation of Australian Unity is well placed for sustainable growth for the three areas.”
The fund management operation reported a pre-tax profit of $5.2 million, which was slightly down on the previous year.
Funds under management grew to $3.6 billion, up almost 33 per cent on the 2005 figure.
“We have achieved pleasing acceptance from investors of our relationships with boutique fund managers such as Platypus,” Mead said.
“This year also saw us bring a product to the market which encompassed two of our areas — retirement villages and investors — through quasi investment notes.”
He said this was an important development in using the skills of two parts of the business to produce a product for investors, and the company was pursuing this way of capital raising further.
However, Australian Unity’s financial planning operation was a blot on the solid results, recording a $1.8 million loss. This follows a $1.019 million loss in 2005.
This year’s loss was also on falling revenue for the operation, which was down to $1.53 million compared to $1.856 million in 2005.
Mead said the loss this year was due to the restructuring of the operation away from Australian Unity retail outlets (which have been closed) towards dedicated offices in local areas.
“The financial planning operation has been difficult, but we are pleased with the result this year,” he said.
“The operation is now on a proper footing and we have recruited planners almost back to the levels before the reorganisation.”
Australian Unity is switching to fee-for-service for new clients, with commissions being rebated. Mead said new clients would pay a portfolio management fee based on the amount of invested assets.
“All fees are fully disclosed and the new [fee-for-service] arrangement is right for our business,” he said.
“We have attracted quality planners for what has become a quality business.”
Mead admitted the original franchise model was wrong, but he would not be drawn on whether the financial planning business would move into the black this year.
