WT Financial’s Cullen shares indicative FY24 results

Licensee WT Financial Group has shared its indicative results for the 2023–24 financial year, including the impact of the Millennium3 acquisition from Insignia Financial.

In an ASX statement, WT Financial Group announced its underlying net profit before tax (NPBT) is expected to be $4.4 million for the 2023–24 financial year, which is up 51.4 per cent from $2.9 million in FY23, after net interest expense of $774,000 (FY23 $751,000).

WT founder and managing director Keith Cullen said the results are indicative of a strong future for advice.

“We’ve remained confident that the outlook for the advice profession has never been stronger for those who embrace its ongoing modernisation,” Cullen said.

“The demand for quality financial and personal risk insurance advice continues to grow as millions more Australians plan for and reach their retirement – at the same time, adviser supply has been reduced and barriers-to-entry remain high.

“We intend to continue to drive paradigm shifts in the licensee-adviser relationship to further improve outcomes for practitioners, their clients and our shareholders, including working with practices to further modernise through technology solutions and corporatisation initiatives.”

The company’s underlying business operations recorded a 15.3 per cent increase in revenue to $185.1 million, up from $160.5 million in FY23. WT added that “solid operating cash flow” resulted in a more than 50 per cent jump in year-end cash to $8 million, which it said would provide for a return to a policy of paying dividends biannually.

Net one-off income and expenses relating to the sale of assets (B2C mortgage book) and purchase of assets (M3) during FY24, WT said, are expected to positively impact profit by $357,000.

This is also expected to increase the statutory NPBT to $4.8 million. This is marginally down from the firm’s FY23 result of $4.9 million, which came after a positive impact on the underlying business of $2 million from gains on contracts related to prior acquisitions.

It also projected a statutory NPAT of around $3.9 million, down from $4.3 million in FY23, a decline of 9 per cent. This compares to a 130 per cent increase in statutory NPAT last year from $1.8 million in FY22 to $4.3 million. 

“However, with the benefit of carried-forward tax losses no cash tax liability will arise,” WT said.

“Notwithstanding carried-forward tax losses, the company has a franking credit balance more than $1.4 million, which will enable a dividend to be fully franked.”

Net assets as at 30 June 2024 increased 14.9 per cent to $29.4 million (30 June 2023 $25.6 million), and the company had a total of 339.2 million shares and 1.5 million options on issue as at 30 June 2024.

“Revenue for the underlying business increased nearly 33 per cent and NPBT was up 43 per cent on the first half of the year, which contributed to an increase of more than 50 per cent in full year underlying NPBT,” Cullen added.

“Significantly, in addition to enabling us to cash fund our $2 million acquisition of Millennium3 in December, consistent positive operating cash flow has enabled us to return to a dividend cycle.

“We’ve seen compounding growth in underlying NPBT above 50 per cent for four straight years now, which underscores and validates the success of our commitment to the modernisation of the advice profession, and certainly bodes well for the company’s future.

“More broadly, our results are not only reflective of our network’s performance, but of a positive future for all advice practices and advice network operators who embrace and drive change.”

WT said it is expected to lodge its financial statements on or before 31 August 2024, and its audited financial statements and annual report by mid-September 2024; however, it added that it does not anticipate any material variances to the indicative results.