Dixon Advisory collapse prompts profit decline at E&P Financial
E&P Financial Group has posted a statutory net profit after tax (NPAT) of $4.1 million in 1HFY22, falling from $4.5 million in the corresponding period, on the back of expenses associated with the collapse of its subsidiary Dixon Advisory.
The firm also said its NPAT had been hit by non-underlying expenses associated with a net decrease in value of non-core investments.
In an announcement to the Australian Securities Exchange (ASX), the company reported net revenue of $110.4 million, up 11%, while its underlying earnings before interest, taxes, depreciation and amoritisation (EBITDA) of $20.7 million increased by 16% compared to last year.
At the same time, E&P Wealth’s net revenue amounted to $45.9 million, up 8% on the previous corresponding period, helped by growth in Evans & Partners Advice and Services revenue and stronger capital markets activity.
The company also said that was transferring its Dixon Advisory and Superannuation Services (DASS) clients, after it went into voluntary administration in November, to a replacement service provider with 70% of clients having chosen to transfer to Evans & Partners, while 16% chose to exit.
The group said that it intended to propose a Deed of Company Arrangement (DOCA) to the voluntary administrators to provide for a comprehensive settlement for the Piper Alderman and Shine Lawyers representative proceedings and all the claims and it would contribute $8.2 million in penalties and costs agreed by DASS in the Australian Securities and Investments Commission (ASIC) proceeding for the benefit of creditors.
As far as the outlook was concerned, the group said its divisional growth initiatives and the resolve of legacy issues related to DASS would remain its priorities over the near-term, with FY22 underlying profit expected to be stronger.
No interim dividend for FY22 was declared as the board said it remained determined to continue the dividend pause while legacy issues were being addressed and remained committed to reverting to a full year dividend payout range of 75-85% of net profit after tax and amortisation (NPATA) in a normal operating environment.
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