Trust profits down on last year

Trust Company of Australia has posted a net profit of $5.4 million for the six months to August 31, down from $5.6 million in the corresponding period last year.

The dip in profit reflects losses in Trust’s fund services, superannuation, private client, and estates and trusts business divisions, as well as the adverse impact of several one-off factors.

The one-off factors include a $900 000 loss stemming from Trust’s recent sale of its equity custody business to ANZ, costs and write-downs involved in exiting its Parramatta accounting business, write-backs associated with surplus lease space, and amortisation of goodwill.

Both the funds management and corporate service divisions improved their profit results, attributed to “good cost control and revenue growth” by managing director Jonathan Sweeney.

Funds under management have grown six per cent since August last year to more than $1.1 billion, while corporate services assets under administration now exceed $100bn, having gained 13 per cent since February.

Sweeney said the interim result - achieved on an underlying net operating profit of $7.0m, up 16.7 per cent on last year’s comparable result of $6.0m - demonstrated Trust’s “momentum in delivering growth”

“Our focus on improving operational efficiencies and growing in areas where we offer real strategic advantage will provide increased levels of shareholder returns.”

He said Trust remained committed to its full-year earnings forecast and to a continuation of dividend payments.

Trust has declared a fully-franked interim dividend of 18 cents per share (up from 17 cents last year), bringing the amount distributed to shareholders in 2004 to 46 cents.

Sweeney was also confident of Trust achieving its full year forecast range of $18.8 million to $19.7 million in operating earnings before interest tax, depreciation and amortization (EBITDA).

Trust’s operating revenue for the interim period to August 31 was up 2.5 percent to $32.2m.