IOOF outlines growth plan
IOOF is to grow its retail operations, including its dealer group, to boost profits in this financial year, chief executive officer Tony Robinson said.
Speaking at the company’s full year results, which saw a 26 per cent rise in after tax profit to $29.2 million, he said future growth would be organic.
“We had a very good year in 2007 and that has created opportunities this (financial) year,” Robinson said.
“We have completed the merger of the dealer groups, and retail growth of funds under management and advice was $1.7 billion.”
Total retail funds under management now stands at $15.3 billion, which is up from $13.5 billion last financial year.
Retail funds under advice, which includes the Pursuit platform stands at $7.6 billion.
Robinson said the platform had attracted net inflows of about $4.2 billion for the year, with most inflows coming during the second half of the financial year.
“We want to increase adviser numbers in the Consultum dealer group during the year,” he said.
“We have a value offering to attract new advisers to the group, which now stands at 112 advisers.”
In recent years funds under advice at Winchcombe Carson had been declining, but Robinson said Consultum now had almost $2 billion of funds under advice, which is getting back to historic levels when it was just Winchcombe.
“If we have more advisers using the Pursuit platform and our products then inflows will increase, which is reflected in profit figures,” Robinson said.
Perennial continues to be a strong performer at IOOF, with total funds under management now at $19.5 billion. This compares to $17 billion in June last year.
However, inflows and outflows almost wiped each other out, with inflows of $6.1 billion and outflows of $6.3 billion, although the manager’s new retail property team continues to attract wholesale mandates.
Robinson said the gross profit on the wholesale business was $42.1 million compared to $26 million last year.
IOOF has allowed an abnormal charge against Perennial of almost $7 million, which will be the final acquisition costs of the deal to acquire the manager. The final figure is linked to the performance criteria of the fund manager before 2009.
Robinson said there was also a charge of $1 million for settling some loans to executives of the company.
Another area of rising costs were salaries, which have jumped to $53.4 million compared to $47.6 million in 2006.
Robinson admitted recruiting staff was difficult and good people are attracting high salaries due to the shortage of people in the financial services industry.
“Salaries are up because of items such as hiring the Perennial real estate team,” he said.
The final dividend for the 2007 financial year will be 33 cents per share, an increase of 22 per cent on the previous final dividend.
AUTHOR
Mike Taylor
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