It might seem difficult to believe that even financial advisers require advice. But in the ever-evolving tech world, everyone can use a little help. Centrepoint Alliance (ASX: CAF) is a diversified financial services company providing lending, technological, investment and advice solutions. It offers software and other resources that help financial advisers give better advice.
In FY23, the Company saw its adviser numbers stabilise across the industry. Adviser retention remained strong despite initial declines caused by the Financial Adviser Standards and Ethics (FASE) exam deadline in the first six months of 2023. Now that the exam is done, more qualified advisers can be hired.
Moreover, Centrepoint saw a 60% decrease in client claims paid related to advisers in the past year, thanks to a solid compliance culture and an internal team vetting advisers and conducting proactive audits.
Seeing its growth trajectory, the Company felt that it was time for a new board to take the helm. After a seven-year tenure as Chair of the Board, Alan Fisher stepped down, effective August 23, 2023. Sandy Beard, a director and investor has also resigned from his Directorship, effective September 30, 2023. Simon Swanson will be the new Chair of the Board, starting August 23, 2023.
Centrepoint Alliance holds the position of the third-largest licensee, having 511 authorised representatives working under the Company’s licenses, and an additional 196 independent practices supported by about 800 advisors. Currently, there is a major pool of potential advisers in talks with Centrepoint Alliance for recruitment, totaling more than 360. The Company has seen solid client retention, with only 2 firms (less than 5%) transitioning to a different licensee.
For its lending division, over $25 million in loans have been successfully processed, and an additional $20 million in loans are nearing completion. Centrepoint Alliance has secured preliminary approval from NAB for a debt facility amounting to $10 million, which will be used to fund acquisitions.
Further bolstering its financial position, in FY23, Centrepoint’s EBITDA reached $7.6 million, marking a 6% rise on FY22. This growth was propelled by higher gross profit resulting from the acquisition of ClearView Advice and organic growth in licensee fees. Profit before tax reached $6.6 million, a significant increase of $4 million compared to the same period last year (PCP). This growth was mainly attributed to factors such as Asset Sales contributing $1.8 million, reduced Long-Term Incentive (LTI) and one-time expenses amounting to $1.7 million.
Gross revenue rose by $43.1 million, marking a 19% increase, and this growth was fueled by a $22.4 million expansion in organic licensed advisers and a $20.7 million contribution from the CVA acquisition.
As a result, the Company’s cash balance increased to $15.6 million, up by $900k from June 2022. On August 22, 2023, the Centrepoint Board declared a fully franked final dividend of 2.0 cents per share. The dividend will be paid on 29 September 2023.
Coming off of a successful ClearView acquisition, the Company has its sights set on more such merger and acquisition opportunities for FY24.
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