Sequoia hungry for acquisitions

Sequoia will continue to acquire mid-tier licensee service businesses within InterPrac Financial planning and Sequoia Wealth Management between 10 to 100 advisers to achieve target to provide services to 1,000 advisers by 2025.

During the webinar, held on Friday, the firm said it would also continue to acquire customer books into salaried advice divisions of wealth divisions InterPrac  Securities and Sequoia Family Office businesses.

Sequoia’s chief executive, Garry Crole, said that the firm had a very low dividend payout ratio and one of the reasons for that was that it wanted to reinvest the cash back into acquisitions or growth strategy, but the cash would be used very selectively.

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“If we're looking to buy a business it would be more like a merger, on the principles that a business wants to be part of our long-term journey. At the moment, smaller businesses are looking to exit and we will be using cash as our funding mechanism,” he said.

“We are acquisition-hungry and there's a number of businesses out there that we would love to talk to.”

Crole said that there were groups of 50 or 100 advisers for which it was very difficult to make a profit and provide certain services to advisers in a cost-effective manner.

“We would love to talk to those parties, and rather than buy and sell we would like to buy and merge those parties give them equity in our business and grow in the long term to the point where we've got 1000 advisers and we're providing the premium service to the market and the advisers themselves being the most important component of getting a fair cost and high service, and they can go out and provide their service to their clients.”

Earlier last week, Sequoia announced a 187% growth in net profit after tax (NPAT) to $5.5 million in FY21.

At the same time, the group’s revenue increased by 37% from FY20 and ahead of budget.

The board declared 0.6 cents per share of final dividend.

Commenting on the long-term outlook, the board said it believed the group was on track to pay regular dividends and continue organic growth of more than 15%.

In the announcement made to the Australian Securities Exchange (ASX), the firm said it was Australia’s fourth-largest non-aligned advisory platform, with more than 400 financial advisers.

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Good on them, it’s heartening to hear some people speak optimistically about our industry… albeit to shareholders!

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