Sequoia flags offloading under-performing businesses
Barely a fortnight after acquiring Libertas Financial Planning, publicly-listed financial services group Sequoia Financial Group has foreshadowed offloading underperforming assets.
The company’s interim chief executive and executive director, Garry Crole, has used an interviewed published on the Australian Securities Exchange (ASX) to point to the likelihood of it selling businesses that it does not believe can generate an adequate return on equity.
Crole expressed disappointment in the fact that the company’s share price had dropped from 32 cents to 18 cents over the past 12 months reflecting a move into loss.
“We have $30 million of equity in this business and I think that the type of return that a business like ours should return is 10 to 15 per cent on equity long-term,” he said.
“…the board is looking at every single business that the Sequoia Group’s got to determine whether that particular business can give us a 15 per cent return on equity,” Crole said.
“If it can, we’re going to support that business and grow that business. If it can’t they’re types of businesses that we might divest and use that cash to invest in the businesses that can.”
Recommended for you
As the first quarter of 2024 comes to a close, Money Management looks back on the corporate regulator’s bans and AFSL cancellations in the financial advice sector.
Insignia Financial is holding ‘relatively steady’ onto its rank as Australia’s second-largest financial advice licensee after the Godfrey Pembroke exit but Count is hot on its heels.
Liberal senator Slade Brockman has said the government needs to have a “cold hard look” at the level of regulation in the financial advice space and the costs of running a business.
FAAA chief executive, Sarah Abood, has warned changes in the first tranche of the QAR legislation around advice fees documentation could create more work for advisers rather than less.