Equity Trustees flags lower profit outlook

Equity Trustees has warned its profit will be between 25 to 30 per cent lower this financial year.

The financial services company reported a net profit after tax of $10.56 million last financial year.

Already this year Equity Trustees has found conditions tougher, reporting a 19.1 per cent drop in after-tax profit for the six months ending December 31.

“The forecast deterioration in the full-year result reflects the severe decline in asset market values at the end of the 2008 calendar year and the early months of 2009,” Equity Trustees chairman Tony Killen warned.

“This guidance (to the ASX) for the full year is dependent upon there being no further material adverse movement in asset market values before the end of the financial year.”

The Melbourne-based financial services company relies on fees levied against the value of assets held by clients.

The current crisis has depressed the value of these assets, which has resulted in a drop in income for the company.

“Despite these severely depressed market conditions, our staff continues to work extremely hard to position our business for the future,” he said.

“We have aggressively pursued new revenue opportunities across all of our business units and we have taken a very strict approach to the control of discretionary expenditure.”

Killen said the company was positioned to respond quickly when market conditions improved.

“The underlying fundamentals of Equity Trustees’ business remain,” he said.

“The company has a strong balance sheet, is debt-free and continues to produce strong operating cash flows.”