Prime results "resilient" in difficult year
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Samantha Hodge is a journalist with InvestorDaily, a Sterling publication.
Prime Financial Group (PFG) suffered a 27 per cent dip in net profit after tax to $2.81 million for the 2012 financial year following a business restructure to address industry changes.
Prime also posted normalised earnings before interest and tax (EBIT) of $5.02 million, down 9 per cent year-on-year, while EBIT, after a capital loss of $0.7 million, fell to $4.32 million.
The financial services company also cites difficult domestic and global economic conditions throughout 2012 for its overall decline in funds under management to $54 million.
Prime managing director and chief executive Simon Madder said that despite economic conditions, the company's diversified model across wealth management, accounting and self-managed superannuation (SMSF) has proven to be resilient.
"In 2012, Prime has delivered consistent revenue compared to the prior year. Growth and expansion across wealth management delivered an increase in revenue of 11 per cent. This was offset by a decrease in underlying revenue in accounting and SMSF services by 5 per cent," Madder said.
For the next financial year, Prime plans to continue driving growth initiatives to increase its network and expand its service offerings.
Although the company plans to focus on expansion, there are no plans to use its capital to grow by acquisition unless there is a demonstrable financial and strategic advantage.
"The directors question the benefit of acquiring generally overpriced principal dependent businesses, which are facing significant structural change and provide limited growth and integration benefits," Prime chairman Stuart James said.
In August, Madder told InvestorDaily that the group plans to press on with recruitment of new joint venture partners for its wealth management business.
The group plans to add a further 10 to 15 accounting firms to its existing 30 firms over the next 12 months.
The new firms will typically be located in Victoria, New South Wales, North Queensland or Western Australia.
In June, the group launched its new managed portfolio service that allows clients to hold a portfolio of investments managed within a separately managed account.
Under the new offering, the client has transparency about what they hold, but they do not have to be involved in every decision, Madder said at the time.
"It is much more scalable, so it means we can still personalise the advice for clients, but a lot of the reporting is taken away because the administrator does that, [so] we can service a higher number of clients," he said.