Clime IM turnaround program leads to return to operating profit
Clime Investment Management has reported a return to operating profit of $406,000 for the first half of FY25.
The firm had previously flagged the return to profit in its quarterly results back in January, having reported an operating loss of $1.6 million in the same period a year ago. For its full-year FY24 results, the firm reported a $3.8 million loss.
However, it reported a statutory loss for the half year of $257,000 because of non-cash amortisation and depreciation charges of $603,000 and income tax expenses of $60,000.
Funds under management and advice were in excess of $1.6 billion, it said.
There had been shareholder backlash to the earlier financial losses that caused the firm to embark on an aggressive cost-cutting program and corrective action, led by managing director Michael Baragwanath, who joined following the exit of CEO Annick Donat.
This program included the disposal of advice business Madison to Infocus for $2 million, an IT systems review, improved middle office and advice technology, and a review of its fund management software solution.
A focus on reducing executive costs and reinvesting in frontline staff resulted in a 20.6 per cent reduction in operating expenses over the six-month period. Non-executive directors Andrew Coleman, Claire Bibby, and Susan Wynne all resigned from the board in October and Clime subsequently appointed chief investment officer Will Riggall and tax lawyer Henry Davis to the board.
“These changes were disruptive but necessary and the business was able to continue to grow operating revenue by 2.4 per cent compared with the previous half year,” the firm said in an ASX announcement.
“The transformation was achieved in six months and we are not slowing down. A pipeline of opportunities are either in negotiation or being explored, as we streamline our product offerings, reconfigure our operations and explore new opportunities to present to our valued clients.”
It also said it has signed two new strategic partnerships that are expected to deliver $130 million in funds under management and $750,000 in annual revenue over the next 12 months.
Baragwanath said: “I am currently focused on enhancing our competitive advantages. Our streamlined management structure, dedicated teams, and lower operating costs set us apart from many of our competitors.
“These strengths, coupled with our extensive range of products and services, enable us to capture and manage a larger share of our clients’ capital with improved margins. This combination allows us to deliver exceptional value in ways that are difficult for others to replicate.
“I believe our complexity as a business with private client advice and sector-specific and multi-asset product offerings is a strength we can leverage to the benefit of both our shareholders and our highly valued clients.”
The board proposed an interim dividend of 0.2¢ per share.
AUTHOR
Laura Dew
Recommended for you
Franklin Templeton has announced it will close its Australian Core Plus Bond Fund, having changed two fixed income funds in its Brandywine range last week.
Investment solution provider Channel Capital has appointed James Archer as its latest distribution director, joining from Pinnacle Investment Management.
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
