New Zealand fertile ground for business acquisitions
Administration company Tranzact Financial Services is preparing for an increase in acquisition opportunities in the New Zealand financial planning market as a result of the impending regulatory changes facing planners in that country.
The company, which is listed on the Australian Securities Exchange, also has a New Zealand arm. One of the group’s initiatives in its New Zealand business is a ‘partnership for growth’ model it calls Camelot. Under Camelot, financial advice practices merge their businesses in an effort to create operational efficiencies.
The group said this “increase in efficiency is particularly important in the New Zealand environment, where regulation of the financial planning sector is imminent”. The group said the impending regulatory changes in New Zealand, coupled with the ageing demographics of financial advisers, are “expected to produce many acquisition opportunities”.
Through its Camelot project, Tranzact is hoping to help advisers improve their business infrastructure so that any operational and earnings efficiencies resulting from business acquisitions can be more quickly realised.
The group said the largest of its recent business amalgamations had resulted in the creation of “one of the largest non-institutional financial planning practices in Australasia”, generating more than AUD$5 million a year in income, with more than AUD$3 million of that recurring on an annual renewable basis.
The group pointed to the work taking place in its Camelot project in its annual report for the year ending June 30, 2009, in which Tranzact recorded profit before tax, depreciation and amortisation of just over $2 million.
Net profit after tax attributable to shareholders fell 8 per cent from the previous year to $1.161 million, however, the group did record a 37 per cent increase in revenue as a result of the inclusion of the Australian Superannuation Consultants business.
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