Improved cash earnings and funds under management and administration have delivered record half-yearly results for IOOF, with net profit after tax jumping 64 per cent to $10.2 million for the period.
The funds management group reported funds under management and administration (FUMA) were up 13 per cent to $25.2 billion and cash earnings jumped 55 per cent to $20.4 billion.
IOOF chief executive Ron Dewhurst said the increase in FUMA was above market growth rates given the company’s business mix and reflected improvements in net sales across the organisation.
IOOF general manager, retail funds management, Jarrod Brown said investment markets had also made a solid contribution.
“We’ve achieved healthy growth in both wholesale and retail flows but, of course, equity markets were in our favour during the period,” Brown said.
Perennial Investment Partners, the group’s wholesale funds management arm, performed strongly across all areas, contributing $12.2 billion to the result, up 36 per cent from last period.
Brown said the group was investigating further opportunities for expansion of its asset management area into new asset classes. He cited Colonial First State’s real estate team moving across to Perennial as the latest example of such an expansion.
Retail funds under management also grew by 13 per cent to $13 billion, despite increased competition.
Brown said IOOF’s dealer group Winchcombe Carson was adding more value to the group than it had done for a couple of years.
“It financially is ahead of its targets year to date, but we’d like to grow that significantly,” he said.
Winchcombe Carson’s financial model was overhauled last September with the introduction of a new remuneration structure and incentives for top advisers, which aimed to lift competitiveness and reduce conflicts of interest.
Brown said the new model reduced the dealer group’s reliance on internal manufacturer margins.
“Future contribution to the group does rely on adviser growth. The financial model for Winchcombe now will see it stand up and continue as a stand alone entity,” he said.
Brown said IOOF was looking to actively grow the dealer group’s adviser numbers and was expecting to announce several new initiatives in the coming months.
