Prime Financial signals ‘acceleration mode’ with $100m revenue target

Prime Financial SMSF mergers and acquisitions

23 August 2023
| By Rhea Nath |
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Prime Financial has announced annual revenue of $33.7 million and will be eyeing further growth to $50 million in FY25, then doubling that figure to an ambitious $100 million by 2030. 

The firm reported 28 per cent revenue growth in the last financial year, of which 19 per cent was organic and the rest came from an acquisition of SMSF administrator Intello in October 2022.

Its underlying EBITDA was $8.6 million, up 11 per cent on FY22. 

“Our FY23 results demonstrate that Prime is delivering on our material growth aspirations,” said Simon Madder, managing director and chairman.

“The revenue increase, driven by strong organic growth across all business lines and the acquisition of Intello, means we are well placed to deliver on our goal of doubling revenue to $50 million in FY25 and then doubling that figure again to $100 million within three to five years of FY25.”

In the last five years since repositioning as a combined group, Prime witnessed between 20 and 39 per cent compound annual growth rate (CAGR), which Madder views as a reflection of a successfully implemented strategy. 

“We’re now starting to deliver some fantastic results consistently, we’re moving into acceleration mode,” he said. 

In the year to 30 June 2023, the majority (80 per cent) of total revenue was generated from existing clients on a recurring basis. 

Organic growth was realised through its four different service lines, namely wealth management, capital and corporate advisory, accounting and business advisory, and SMSFs. 

Prime also saw new service offerings through the year in debt capital advisory, ESG consulting, and the expansion of its wholesale investor service. According to Madder, some 50 to 55 per cent of clients are wholesale clients within its wealth management division.

Around $500,000 was the investment in the first half of the year towards these offerings, and Prime said it typically takes six to nine months for these investments to make a positive contribution to earnings.

Previously, the firm had flagged the potential of acquisitions, such as its deal with B2B SMSF administration provider Intello, to complement its ambitious growth targets. 

“We look at acquisitions across all four service lines at the moment but particularly, we look at not just what it will do for that service line but what it could do more broadly for the business – the theory of one and one equaling three, in terms of how it can go other parts of the business,” Madder said.

“As an example, when we looked at Intello acquisition in SMSF, that wasn’t simply about scaling the SMSF part of our business, which was obviously important, but also about what else we could deliver to the circa 200 accountants and financial advisers that white label that SMSF service.”

Looking ahead, he believes the firm is in a “really privileged position” with uncapped opportunities for growth and expansion.

“Having a great team that can deliver on opportunities is the no. 1 thing I’m excited for. I wouldn’t be surprised to see, in the next two to three years, staff numbers increase by 50–100 per cent,” he stated.

Currently, some 45 per cent of the company is owned by the team, which is projected to increase to 48 per cent as more staff reach the equity level.

“In November of this year, another 40 team members will become shareholders in the business,” Madder shared.

“We are using this strategy to make sure that everyone is treated like an owner and acts like an owner, and grows the business together. We also use this as a tool with which to recruit great future team members for the business.”

 

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