PIS goes through bittersweet times
Professional Investment Services (PIS) accounting arm Professional Accounting Limited (PAL) has cancelled a planned acquisition and expansion after failing to secure adequate funding in a capital raising.
The delay for PAL came about after it failed to reach a $5 million minimum of the $15 million it was seeking through an internal capital raising and follows the recent news that PIS had also called off its planned listing.
PAL managing director Graham Evans says the reason for the lack of capital being raising related to a misunderstanding of the PAL structure, as well as the impact from global economic conditions.
“Some people view PAL as a consolidator, which we are not, and this may have deterred their involvement and people knew the world economy was falling before September 11,” he says.
Accountants having their cash reserves locked up leaving them without liquid cash assets was another reason for the poor response Evans says.
PAL is now looking externally for the capital required, through their association with PIS and Evans says the group are in talks with a range of institutions on the financial planning side and interest has been strong.
“We are positive about the capital raising, and do not think the issue of the global economy will detract from this business. PAL hopes to be up and running by early next year with other acquisitions,” he says.
The news comes after PIS confirmed it has called off its intended stock market listing despite a large recruitment push which resulted in PIS storming into the second position in the Money Management Top 100 Dealers list with more than 1100 planners.
PIS managing director Robbie Bennetts says the two actions are not the result of any problems with the groups but rather the result of the shifting economic environment after September 11.
“We have decided to put the listing on the backburner, and have deferred the listing for further consideration. We just don’t think this environment is right for the business, and will defer the listing until the market is right,” Bennetts says.
PIS was expected to list on the Australian Stock Exchange before the next financial year, but Bennetts says the group is now in no rush to list.
“Since the US attacks, if you listen to the reports then we are in for two years of tougher times. We won’t do anything until competence in the market grows,” he says.
While the listing has been indefinately postponed Bennetts says PIS is continuing to focus on its strategy, with strong moves which will grow the business. At the group’s recent annual group meeting, an increase in profit was also announced but Bennetts says it is not company policy to release those details.
Rather he says the dividend paid to original shareholders over the first five years was more than 700 per cent on a fully franked basis.
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