New ventures lead to solid Centrepoint profit
Centrepoint Alliance Limited has posted a net profit after tax of $5.9 million, up 78 per cent on the previous financial year, with the group's wealth management division acting as a strong contributor to the growth of that figure.
The listed financial services group stated it would also pay a final dividend of 1.2 cents per share, following the payment of an earlier one cent dividend in February of this year, which was the first dividend payment from the group in eight years.
Centrepoint Wealth posted an underlying pre-tax profit of $7.1million, up 10 per cent on the previous financial year with funds under management increasing by 14 per cent to $2.8 billion. This growth was driven by a ten times increase in net flows from $19 million to $211 million with Centrepoint stating this came off the back of the launch of the group's salaried advice channel and its own separately managed account service.
The group also spent $2.4 million during the past financial year dealing with legacy claims stemming from advice prior to July 2010, compared to $1.9 million in the previous financial year, with the higher number attributed to greater media focus on advisers and advertising by lawyers seeking claims related to financial services.
A further $800,000 was spent on book acquisitions with the group's financial statements describing this cost as relating "to clients purchased from in-house advisers to be serviced by the salaried advice team".
The group's other main business arm, Centrepoint Funding, provide insurance fund and mortgage and asset finance services posted an underlying pre-tax profit of $2.5 million, down 52 per cent on the previous year.
Centrepoint stated this was "due to the soft general insurance market impacting the amount of premiums funded" but stated there was growth in new broker relationships and loans funded as well as the establishment of a premium funding business in New Zealand.
Centrepoint, managing director, John de Zwart, said the group held strong positions in its core markets and was well positioned to take advantage of growth in non-bank funding and wealth markets.
"With cash and cash equivalents of $12.5m at 30 June, 2015, the group is in a strong financial position from which to deliver organic and inorganic growth. We have acquired a number of small client books and are active in assisting larger practices to grow or develop succession strategies," de Zwart said.
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