Perpetual positions for growth despite profit decline
Perpetual Private has been positioned for further growth, including acquisitions, despite Perpetual today reporting a 17 per cent decline in net profit after tax on the back of lower performance fees, net outflows and increased investment in strategic initiatives.
The company’s full-year results, announced to the Australian Securities Exchange, reflected what the chief executive and managing director, Rob Adams, described as a financial services industry experiencing significant disruption.
“Along with many of our peers, our business was impacted by market uncertainty and a challenging operating environment,” he said.
At the same time, the company used an investor briefing to describe Perpetual as being “uniquely positioned to benefit from industry dislocation”.
It pointed to what it described as seismic shifts in the adviser landscape entailing significant regulatory change and large organisations exiting aligned advice models. Adams suggested that this fast-changing landscape presented opportunities in circumstances where clients were expecting personalised service from experienced and qualified advisers.
The company said its response had been the launch of industry leading professional services model and flagged the recruitment of five advisers in the first quarter of the current financial year and a further six in the second quarter.
Further, it said it had an active mergers and acquisitions pipeline for “bolt-on acquisitions that align to our model”.
On a business unit bases, the company reported that Perpetual Private’s profit before tax was 11.2 per cent lower at $41.2 million with the decrease largely due to increased investment in strategic initiatives to support future business growth.
Adams said that while the business had observed many players exiting the wealth industry, with financial advisers being displaced on a weekly basis, by contrast, Perpetual Private was well positioned to take advantage of the dislocation and had added five new quality advisers in the second half.
“We have transformed Perpetual Private’s client offer to provide holistic advice in a professional services model,” he said. “the new model provides greater transparency in structure and seamless access to clients to a team of experts to meet their advice needs.”
The company reported that Perpetual Investments profit before tax was $79.9 million which was 29 per cent lower than last year.
The board declared a fully-franked dividend of $2.50 per share.
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
