Snowball upgrades profits
Listed financial planning group Snowball has upgraded its profit forecast for the second time in a month, reporting it is now on course to register a $1 million result for the current financial year.
The result, before interest, tax and depreciation, is 15 per cent better than the $870,000 profit forecast issued by Snowball in April — itself a 34 per cent rise on earlier predictions.
Snowball managing director Tony McDonald said the improved performance was the result of more stable than expected investment markets and the performance of two financial planning businesses it acquired last year — Aspire Financial Services and Dunhill Financial Services — being “slightly better” than expected.
“We spent a lot of time making sure that those businesses would ‘fit the family photo’ and as its turned out, they very much fit…as a consequence, they are performing very well,” McDonald said.
The result is a far cry from the low years of 2002 and 2003, when Snowball posted losses of $6.16 million and $3.45 million respectively. McDonald said in earlier years, the group had invested heavily in the back-office and head office.
“If you go back a few years you can see we were spending a lot of money for back-office and head office and we’re now starting to see the benefits of that.”
McDonald said demand for the company’s back-office services was growing as super choice sparked investor interest, and financial planners considered moving to advice models and outsourcing back-office systems.
The group is also continuing its strategy of mergers and acquisitions.
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