Giving up extra office space helps financial firm improve cost
Wealth Today’s ASX-listed parent company, WT Financial Group, is expecting further growth in revenue and an improvement on costs upon finalising its program which assumes giving up surplus office space, the firm said in the announcement made to the Australian Securities Exchange (ASX).
The impact of the recently implemented cost restructuring scheme, which emphasised the capitalisation opportunities based around an exit of the institutional advice model and rationalisation of B2C financial advice and wealth management operations conducted under the Spring Financial Group model, helped WT Financial Group bring down the occupancy costs by 31% on the prior year.
For FY2020 total operational expenses (excluding depreciation, amortisation, interest and tax) were down around 15% to $5.12m compared to FY2019 ($6.04m).
The move was partially aided by a relief afforded the company by its Melbourne and Sydney leasors under the COVID-19 commercial tenancy code, it said.
The success of securing a sub-tenant for its surplus office space in Sydney, with effect from 1 August, saw the company manage to improve its net cost in Sydney by $180k per annum.
Additionally, it said it would see a further $35k per annum improvement from October 2020 through existing surplus Perth office space, a move which was helped by a shift of several roles and responsibilities across it B2B operations in Sydney.
At the same time, WT Financial Group would continue to seek a sub-tenant for its Melbourne office space, a surplus which emerged from the restructure and the same components of its B2C operations.
According to the company, it would help achieve a further reduction in office accommodation expense of up to $180k per annum.
For FY2020 total operational expenses (excluding depreciation, amortisation, interest and tax) were down around 15% to $5.12m compared to FY2019 ($6.04m).
At the same time, the firm said employment expense was down 16.9% to $2.89m, driven by restructuring initiatives combined with theCOVID-19 related reductions in the latter part of the year.
Commenting on the interim results, managing director, Keith Cullen said: “We are delighted to have been able to continue our growth and deliver such a significant turnaround in operating profit despite the economic headwinds of COVID-19.
“We anticipated further and sustainable growth in revenue and there remains room for improvement on costs as we finalise our program of exiting surplus office space.”
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