Lifeplan Australia Friendly Society has reported a drop in post-tax profits to $1.4 million for the 1999 financial year.
Lifeplan Australia Friendly Society has reported a drop in post-tax profits to $1.4 million for the 1999 financial year.
Managing director Chris Wright says the $140,000 drop was due to three reasons.
“The first was the cost of implementing Year 2000 to our systems. This was accounted for in the 1999 financial year rather than spreading it into this financial year,” he says.
The costs of merging with StateGuard Friendly Society was also included in the 1999 financial year. Wright says the merger was completed by June 30, despite the formal take-over of operations only occurring in April.
While Lifeplan hasn’t disclosed the total cost of the merger, Wright says date conversion cost about $250,000. There was an upgrade to Lifeplan’s computer system to handle the extra business as well as some redundancy costs in downsizing the Victorian friendly’s Melbourne office.
Wright says the third expenditure for the year involved complying with APRA and the new regime for friendly societies.
Despite the profit drop, Lifeplan boosted its management fund to $17.7 million, up $2.1 million on the previous year. The merging of StateGuard’s management fund provided $636 million of the in-crease.
Wright says the successful merger of StateGuard has given the company a model to use in future acquisitions and mergers.
“After five mergers in recent years, this is now part of our culture and mergers don’t stop the day-to-day running of the business,” he says.
The South Australian group also boosted its funds under management by 33 per cent during the past year to $883 million.
