Trust outperforms expectations

Business restructures in the financial services and institutional divisions, along with last year’s strategic entry into a joint venture with Bank of New York, have delivered stronger than expected results to Trust Company of Australia.

The company reported a 32 per cent increase in operating earnings before interest tax, depreciation and amortisation (EBITDA) to $18.9 million for the group. This exceeded earlier guidance by $400,000.

Trust Company managing director Jonathan Sweeney said with the restructure of the divisions complete, the company was concentrating on growing and strengthening each of its businesses in their specialist markets.

The company’s financial services division — which includes estates and trusts, private clients and funds management — performed strongly with revenue increasing in each area.

“This year we will be investing in key areas to maximise future revenue streams, grow our market position, and increase shareholder returns,” Sweeney said.

“This will have an impact on earnings growth in the 2006-07 financial year, but as we gain momentum, we expect margins to increase.”

The company expects full year results to be approximately 8 per cent higher than the $15.9 million achieved last year, dependent on a small increase in the Australian equity market and contribution from the Bank of New York arm, which may be impacted by the planned acquisition of JPMorgan Chase’s global corporate trust business.

Sweeney said the company now intends to expand operations into Hong Kong and Singapore, which is seen as a natural extension of the company’s core strength in providing property fiduciary services.

“The Asian REIT [real estate investment trust] market is expected to grow significantly over the next few years and we are well placed to service not only Asian-based clients but also Australian clients who are considering launching Asian REITs.”