Deakin Financial Services Group (DKN) has amassed a war chest of $6 million, which it plans to use on acquisitions to grow its business in an attempt to compete with much bigger rivals.
DKN chairman Rob Hunwick told the group’s annual general meeting (AGM) today the business, which includes the Deakin dealer group, was not content to “grow merely by organic means” and that it needed to “grow by acquisition so as to compete with larger players”.
Hunwick later told Money Management DKN wanted to use the funds to buy into financial planning dealer groups, or other financial services businesses focussed on product distribution, including investment platforms.
DKN purchased the AustChoice master trust platform in January this year – a move Hunwick said changed the company from one whose primary business was a financial planning dealer group, to one whose focus was on the distribution of products to non-aligned advisers.
“Deakin was very much a dealer group before…but the AustChoice acquisition changes the focus and now we are focused on wider issues of distribution,” he said.
However, Hunwick acknowledged it would be difficult to find appropriately priced targets for acquisition.
“The problem is there are a lot of businesses for sale but for the price they want you to pay, you are not getting the quality,” he said.
“But we are interested in expansion in the dealer group area or…other areas involving distributions.”
Hunwick told the AGM that DKN was on track to pay a dividend of at least 1 cent per share to shareholders by the end of June, 2005. The group paid its maiden dividend of 0.4 cents per share earlier this year. It has also paid a further $200,000 worth of fully franked dividends to advisers who have recommended DKN products.
The group’s shareholders also voted today to reduce the number of shares on offer, by accepting one new share for five old ones to increase the price per share.
DKN shares commenced trading this morning at 14.5 cents.
