Equity Trustees’ profit hit by Trust takeover costs
Equity Trustees (EQT) has reported a net profit after tax of $8.7 million for the 12 months to the end of 30 June 2013, stating that the result was affected by costs associated with its takeover bid for The Trust Company (Trust).
The result was 3 per cent higher than for the previous 12 months despite EQT being hit by $1.1 million in costs associated with the bid for Trust.
EQT chair Tony Killen said the result was boosted by solid performance by its Private Wealth Services advice business and Corporate Fiduciary and Fund Services distribution and product management businesses, as well as strong growth in funds under management and client numbers.
EQT also reported 9 per cent revenue growth, which managing director Robin Burns stated came about despite the costs of preparing for the Future of Financial Advice (FOFA) reforms and Stronger Super. EQT had kept operating expense growth to 6 per cent.
Burns also said that EQT had $1 billion in net inflows to EQT co-branded managed funds in the 2012-13 financial year, an increase of 110 per cent over the previous financial year, lifting its funds under management to $32.28 billion.
Killen acknowledged that the take-over bid for Trust had been extended due to further due diligence work by both groups and the review of a competing offer from Perpetual by the Australian Competition and Consumer Commission (ACCC).
He also asked shareholders of Trust to remain engaged and consider EQT's offer for Trust as the more attractive proposal. He claimed they would benefit more significantly in the long run compared with accepting Perpetual's offer.
EQT and Perpetual have been engaged in a long-running competing process to take-over Trust, with the ACCC to release its final report on Perpetual's offer in mid September.
Speaking about the competing bids for Trust and the concerns raised by the ACCC, Perpetual managing director and chief executive Geoff Lloyd stated: "In our view, those are matters that we understood when we went into the transaction and therein in our view we don't think that any of the issues raised by the ACCC will prevent the proposal from proceeding".
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