Trust Company posts slim profit ahead of merger

Financial services company Trust Company of Australia has posted a profit of $1.97 million for the six months to August 31, which was almost 8 per cent down on the corresponding period the year before.

The result comes as the company works to finalise its plans to merge withPermanentGroup, which is hoped to receive shareholder approval on October 31. The result was affected by $320,000 used in merger costs, which would have otherwise seen the company posting a profit of $2.2 million, or an increase on the corresponding period last year of 2.5 per cent.

Trust Company’s managing director Jonathan Sweeney says the result boded well in the company’s efforts to effect the merger with Permanent.

“It is pleasing to be able to announce another solid result, particularly as we prepare for our merger with Permanent. The merger is on track and our integration planning process is going well,” he says.

Revenue increased by more than 11 per cent, or $1.16 million, to $11.41 million. Trust Company attributes its increased revenue to its growing financial planning and superannuation divisions, along with strong growth in its traditional trusts and estates business.

The Trust Company’s funds reported lower profitability due to expansion of the funds management team, while revenue from private clients’ business was impacted by weaker investment markets, the company says. The superannuation division however, recorded a profit of $700,000.

The company expects merger costs for the full year to reach $1.3 million, including the $320,000 expensed in the six months to the end of August.

“The merger with Permanent will be our major focus over the next half, as we work to create a leading financial services organisation,” Sweeney says.

If approved, the merger should be in place by the middle of November, the company says.