Insignia underlying profit soars 79%
Insignia Financial has delivered a strong half-year profit with underlying net profit after tax jumping to $117.9 million, up 79% on the previous corresponding period, following the acquisition of MLC Wealth.
Reporting its half year results to 31 December, 2021, Insignia said its funds under management, advice and administration (FUMA) had increased by $7.1 billion to $325.8 billion while its gross margin of $778.4 million was up by 122% including a 6-month contribution from MLC.
Net profit after tax (NPAT) was $36.2 million, down from $53.8 million a year ago, which reflected an increase in integration and funding costs.
Insignia chief executive, Renato Mota, said: “Our first results as Insignia Financial delivered a strong uplift in financial performance, with significant growth in underlying profit, FUMA and gross margin.
“Our strategy for growth centres on scale, economic diversity, and a sustainable business model that delivers accessible and affordable products and services relevant to all client life-stages. While our name has changed, our ambition remains to improve the financial wellbeing of all Australians.”
Insignia highlighted the MLC acquisition, strong market performance, and the realisation of synergies and benefits from strategic initiatives as key reasons for growth with net profit after tax (NPAT) moving up $36.2 million, reflecting an increase in integration and funding costs of $35.4 million.
It said acquisition synergies were 18 months ahead of schedule with cumulative annualised savings of $122 million, $66 million of which was achieved in 1H22 and expected to be realised by the end of calendar year 2022.
It said it was on-track to achieve break-even of ex ANZ Aligned Licensees (Als) advice business on an annualised basis by end of FY22.
Mota said: “Our integration initiatives and early simplification efforts have proven successful to date. Our business is acutely focused on operational simplification, enhancing products and services, and delivering long term value to clients, members and shareholders.”
The firm posted an interim dividend of 11.8 cents per share fully franked, payable 1 April and introduced a dividend reinvestment plan with a 1.5% discount.
AUTHOR
Liam Cormican
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