Link Group has announced a 6% year-on-year drop in its overall revenue to $1,160 million for FY21, driven down by the impact of COVID-19 on the European part of business and regulatory changes in retirement and superannuation solutions (RSS) following the transfer of many low balance, inactive accounts by the Australian Taxation Office (ATO).
In its FY21 results released to the Australian Securities Exchange (ASX), the group’s statutory net loss after tax was $163 million, compared to a loss of $103 million in FY20. This was due to a non-cash impairment charge of $183 million related to the banking and credit management business which saw low levels of new business activity because of COVID-19 and the associated high levels of government intervention reducing portfolio sales in the market.
The operating net profit after tax and Amortization (NPATA) stood at $113 million for FY21, down 18% compared to FY20, and included a $32.7 million contribution from PEXA.
Its operating earnings before interest and taxes (EBIT) and operating cash flow dropped to $141 million (down from $180 million) and $293 million (down from $319 million), respectively.
The group saw RSS revenue, which accounted for 43% of total group revenue, go down by 4.3% to $507 million, because of the impact of regulatory changes which led to a reduction in members and the normalisation of non-recurring project revenue.
Link Group’s chief executive and managing director said, Vivek Bhatia, said the financial results for FY21 were in line with expectations, given the FY21’s headwinds.
“Our business is in good shape, with high quality technology platforms supporting industry leading market positions, a large recurring revenue base, and strong partnerships underpinning the growth of our client base,” he said.
Commenting on the future outlook for the group, Bhatia said the group would expect low single digit revenue growth in FY22 while the investments in technology and people were expected to help drive growth which would result in FY22 operating EBIT bring broadly in line with FY21.