Trust merger pays dividends

Financial services groupTrusthas posted a healthy profit in its first full reporting period since being spawned from the merger of Permanent Trustees and Trust Company of Australia last year, attributing the performance to cost synergies stemming from the merger.

Trust posted a net profit for the six months ending August 31 2003 of $5.56 million, with an operating revenue of $32.8 million for the half-year.

Trust managing director Jonathan Sweeney says the performance of the new entity is evidence the merger is going well.

Sweeney says that while it is difficult to compare the merged business to the results pre-merger, when the result is analysed on a per share basis and adjusted for non-operational items, comparisons can be made.

“On this basis, the half year to August 2003 provided a per share result of 18.5 cents versus the prior period’s 12.2 cents which represents a 51 per cent improvement on a per share basis,” Sweeney says.

“This is a good indicator of the value the merger is creating for our shareholders,” he says.

Trust says another indication of the success of the merger is that operational margins in both the August 2002 and 2003 result were similar.

As a result, Trust distributed a fully franked dividend of 17 cents along with a fully franked 15 cent special dividend, largely due to the sale of a property the group owned in Sydney’s suburb of Edgecliff.

Trust says management will now increase focus on growing revenue across the group, with the recent appointment of Anthony Sider as general manager of Trust’s funds management division expected to help towards this end, as the group rolls out its Australian equities capabilities beyond its internal client base.