Centrepoint posts $11 million turn-around in profit
Centrepoint Alliance has posted an $11 million turn around in after tax profit in the last 12 months reporting a $3.3 million profit for the past financial year up from the $7.8 million loss reported in the 2012-13 financial year.
Centrepoint Wealth, which owns planning groups Professional Investment Services (PIS) and the newly launched Alliance Wealth as well as dealer services group Associated Advisory Practices, reported a underlying pre-tax profit of $6.5 million, down from $6.7 million in the previous financial year.
However statutory profit before tax — which includes costs related to legacy claims expenses, impairments, amortisation and restructuring — was $3 million, up 149 per cent from a $6.1 million loss in the 2012-13 financial year according to results released to the Australian Securities Exchange.
The results announcement stated that "operational efficiencies and a reduction in client claims expense from $9.98 million in 2013 to $1.88 million in 2014 were the major contributors to the return to profitability".
However revenue for Centrepoint Wealth decreased by 10 per cent to $32.4 million with the results announcement stating this was "due primarily to the reduction in the number of Wealth's Authorised Representatives up to the end of the 2013 calendar year" but this number had stabilised in the second half of the financial year and had increased in the last quarter of the same.
The other substantial contributor to the results was Centrepoint Funding, which provides insurance for corporate and retail clients, and reported a statutory profit before tax of $5.14 million, up 43 per cent from $3.6 million. Revenue also grew by 16 per cent to $18.59 million driven by a growth in market share particularly on the east coast.
Centrepoint stated that as a result of the profit position it would resume paying dividends to shareholders with a final dividend of 2.2 cents per shares fully franked to be paid on 15 October 2014.
The turn-around in results following the successful completion of an Australian Securities and Investments Commission required Ongoing Monitoring Program in which an independent expert appointed to report on the group stated that significant improvements had been made to Centrepoint's compliance and internal audit functions and financial advice risk management framework.
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