Perpetual overestimates smartsuper
Perpetual has run into trouble with the self-managed superannuation fund (SMSF) business it acquired in 2008.
The carrying value of the group’s smartsuper business exceeded its estimated fair value by $10.6 million, according to an internal review.
This will result in a goodwill impairment charge of $10.6 million after tax in the group’s financial statements for the six months ending 31 December, 2010, according to a statement from Perpetual to the Australian Securities Exchange.
The non-cash charge does not materially affect the group’s liquidity, cash flows, current or future operations, or the operations of the smartsuper business that contributes about 1 per cent of the group’s total revenue, Perpetual stated.
Smartsuper is a SMSF administration provider based in Sydney that Perpetual acquired in September 2008, and the ability to maintain profit margins and growth are being challenged by what is proving to be a very competitive environment, Perpetual stated.
The board intends to exclude the goodwill impairment charge in determining its 2011 financial year dividend and did not expect the downgrade to materially affect the group’s underlying profit, which is currently expected to be $41 million, slightly above previous guidance of $35 to $40 million.
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