Genesys shines ahead of schedule
Kerry Packer backed-Challenger Financial Services’ purchase last year of Associated Planners is paying surprise dividends, with Genesys Wealth Advisers pushing well into the black one year before it was supposed to.
Genesys, which was formed in February when Challenger-owned Garrisons Financial Planning merged with Associated Planners, contributed a $4 million after tax profit to the wider Challenger group — a $9 million turnaround from what was a $5 million loss for Garrisons in 2004.
“We’ve had a successful integration of the Garrisons and Associated Planner businesses… the business has been profitable from the very first day of trading,” Challenger managing director Mike Tilley told investors last week after reminding them that he only expected Genesys to start pulling in profits from January 2006.
The funds management division of Challenger’s wealth management arm, which broke even in 2004, contributed a small profit of $2 million after tax in 2005. This slight improvement was assisted by the successful acquisition of HSBC’s wealth management operations in March.
The wider Challenger Financial Services Group, which was well in the red last year, returned a 100 per cent increase in profits after tax to $94 million, mostly boosted by the company’s annuity business Challenger Life.
Challenger Life benefited from changes last September to asset test exemption laws, which saw annuity sales increase to $666 million from the usual $300 million per annum.
Tilley also told investors the group had benefited from a head count reduction of almost 300 across all of its businesses, and a cleaning up of its back-office processes.
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