Sequoia posts higher NPAT for 1H22
Sequoia Financial Group has reported net profit after tax increased to $2.6 million from $1.7 million for the half year ended 31 December, 2021.
At the same time, revenue stood at $79.1 million, an increase of 51% compared to 1H21, while earnings before interest, taxes, depreciation (EBITDA) saw a 38% increase to $5.5 million. However, the EBITDA margin of 7% was down 1%.
The company said in the announcement to the Australian Exchange Securities (ASX) that historically the first half was lower, and expected to improve in 2H22.
The group’s managing director and chief executive, Garry Crole, said
the company typically made better profits in the second half of the financial year and he expected this would be repeated for 2021-22 as all four Sequoia businesses posted higher revenue than the first half of 2021.
“Although the sector faces many challenges, these are exciting times, especially for Sequoia’s largest division, Wealth that continues to grow as the major banks exit financial advice and advisers seek a licensee that can pro-actively assist them to maximise business opportunities and effectively navigate regulatory and compliance demands,” he said.
“There are approximately 16,000 authorised representatives providing advice under around 2,000 AFSLs in Australia. In addition, there are approximately 10,000 individual accounting practices and there’s no reason why every one of these cannot access a service from one of the Sequoia entities”.
Crole said that Sequoia’s strengths lay in the separation from product and it used scale to provide services to drive down the end cost of providing advice to their clients.
As far as the long-term outlook was concerned, the group’s key objectives would still include the revenue increase to $400 million by FY 2025, maintain operating profit margin (EBITDA) at 8% and provide services to at least 1,000 advisers and 3,000 accountants by 2025.
“Australians have approximately $14 trillion of private wealth, of which approximately $6.6 trillion is invested in a ‘managed investment’ of some kind and they need to be able to access the services of a qualified professional as intergenerational wealth passes through families, and retirees capitalise when downsizing the wealth created from the SG system and rising home prices,” Crole added.
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