Snowball acquires QLD practice, posts strong profit
Dealer group Snowball has announced it has wholly acquired the equity in Western Pacific Financial Group's (WPFG's) Cleveland practice in Queensland, which will adopt the group’s unique 'franchise-type' dealer group model.
According to a company statement, WPFG Cleveland has $420 million in funds under advice (FUA) and eight advisers, and will remain licensed to WPFG.
The effective date for the transaction was 1 January, but it is expected the transaction will be completed by the end of the first quarter of 2011.
Funds for the consideration will come from existing cash resources, assisted by the capital raising, the company said.
This comes as Snowball has posted a strong profit for the first half of the year, thanks in part to the acquisition of the revenue rights of its portfolio administration business, Symetry Portfolio Service.
Reported net profit after tax (NPAT) for the company was up 21 per cent to $2.2 million on the prior corresponding period, while underlying NPAT, which Snowball prefers to use as a profit measure, shows a much more subtle increase of 10 per cent to $3.4 million.
Excluding the funds under management and administration from the recent acquisitions of Officium Capital and Symetry, Snowall’s FUA rose 3 per cent on the prior corresponding period to $4.7 billion.
The company stated that this increase was primarily driven by market movement, with net flows remaining relatively flat over the period due to continued weak consumer sentiment.
Managing director Tony McDonald said Snowball’s acquisitions have performed well, enabling it to reinvest in the business and assist the company to enhance advice business models and dealer services offerings.
“We are going into the second half of 2011 with momentum, in relation to both our operations and our acquisition pipeline,” he said.
Snowball’s board has also announced it will increase the interim dividend by 20 per cent on the prior corresponding period to 1.50 cents, which will be fully franked.
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