Clime IM forecasts $1m savings from cost reduction program
Clime Investment Management expects to see $1 million reduction in operating costs as a result of a cut in board and leadership costs.
Earlier this month, three non-executives of Clime IM – Andrew Coleman, Claire Bibby and Susan Wynne – resigned from the board and were replaced by two new non-executive directors in Will Riggall and Henry Davis, with a search commenced for additional non-executive directors.
At the time, Clime IM managing director Michael Baragwanath mentioned costs in every part of the business were coming under scrutiny.
It also saw the exit of group chief executive Annick Donat earlier in the year.
In an ASX update, it said this rigorous approach to cost-cutting is expected to see a $1 million operating cost reduction in the second half of FY25. The program is expected to be completed early in the December quarter, it said, which will lead to positive operating cash flow being generated in the second half.
“With a clear focus on funds management and wholesale advice, Clime has put in place initiatives to significantly reduce overheads that will magnify the returns from increased revenue that flows from FUM and FUA growth. These cost out initiatives include a significant reduction in both board and leadership team costs.
“As part of the cost out exercise the board (itself) has now announced and undertaken a fee and cost reduction consistent with other cost out initiatives.
“The benefits of these initiatives will become evident in the June half of FY25 and will be enhanced as both insurance and IT costs decline rapidly.
“Shareholders can expect to see a substantial reduction in the annual operating costs (net $1 million) adding to the benefits of removing the annual operating losses of Madison Financial ($0.5 million) to position the company into solid cash profit from October 2024.”
On its wealth division, Clime said it has a “heightened focus” on fully servicing its wholesale client base, with Matt Rencken appointed to lead the private wealth business and Garth Curry appointed to run a distribution and key accounts team.
It also completed a 50 per cent acquisition of its joint venture James Street Wealth to establish Clime Private Wealth Qld which has $153 million in funds under advice.
At the end of the September quarter, the firm said funds under management and advice were $1.6 billion.
AUTHOR
Laura Dew
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