Prime Financial Group Limited · ASX:PFG
Prime Financial — H1 2019 Earnings Presentation
23 slides from Prime Financial's earnings presentation, Feb 27, 2019
Slide 1: Half Year 2019 (1H19) Results Presentation
For personal use only Prime Financial Group Ltd (ASX: PFG) Half Year 2019 (‘1H19’) Results Presentation 27 February 2019
Slide 2: Important Notice & Disclaimer
Important Notice & Disclaimer For personal use only This investor presentation (Presentation) has been prepared by Prime Financial Group Limited (‘PFG’). Summary Information This Presentation contains summary information about PFG. The information in this Presentation is general background informati
Slide 3: Key Points
Key Points For personal use only Organic revenue growth from new services and past acquisitions materialising Integration prioritised over acquisition in following 12 months 100% owned and operated full-service firm across Melbourne, Sydney and Brisbane Hayne Royal Commission recommendations a net p
Slide 4: 1H19 Highlights
1H19 Highlights For personal use only 01 02 03 04 05 Focused Growth Leveraging existing Integration to Accelerate Divestments and Focus Key Takeaways Platform on Core • Revenue growth materialising • Three core hubs in Melbourne, • Acquisition of Corporate Advisory • Divestment of minority equity •
Slide 5: Key Financial Metrics
Key Financial Metrics For personal use only 1H19* versus 1H18: Company 1H19 1H18 Movement*** Revenue - contracts with customers $10,448k $10,278k $170k 2% (Reported) Total Revenue (Reported) $11,104k $11,172k ($68k) (1%) EBITDA** – Members (Reported) $1,693k ($1,092k) $2,785k 255% EBITDA** – Members
Slide 6: 1H19 Revenue
1H19 Revenue +2.0 For personal use only How are we growing? 21.3 Focus on integration of own operations in Accounting & Business Advisory, Wealth Management and Capital Services in Melbourne, Sydney and Brisbane 19.1 Improve and grow partnerships with Accounting Firm’s Expansion of SMSF and Capital
Slide 7: 1H19 Expenses
1H19 Expenses For personal use only Of the $0.74 million increase in expenses, 81% relates to employee benefits of which half are non-recurring in nature +0.03 +0.11 9.75 +0.60 Operating Expenses AUD million* 9.01 10 Includes: • Investment in SMSF & Capital Advisory team • 1H19 non-recurring costs v
Slide 8: EBITDA & NPAT Attributable to Members Reconciliation
EBITDA & NPAT Attributable to Members Reconciliation For personal use only EBITDA reconciliation: NPAT attributable to members reconciliation: $000 AUD 1H19 1H18 $000 AUD 1H19 1H18 Profit after tax from operations (Group) 1,286 (637) NPAT attributable to members - 734 (1,309) Add: Tax expense 325 (2
Slide 9: 1H19 Balance Sheet & Cash Flow
1H19 Balance Sheet & Cash Flow For personal use only Operating cash flow was +$1.6 million Investing cash flow of ($3.2) million includes the PWM share buy-back and dividends paid out Finance cash flow was substantially the drawdown of the debt facility BALANCE SHEET CASH FLOW At 31 At 30 1H19 1H18
Slide 10: 1H19 Net Debt Analysis
1H19 Net Debt Analysis For personal use only Group net debt of $9.8 million at 31 December 2018 was $2.1 million higher (substantially due to acquisitions of $1.7 million) than Group net debt at 30 June 2018 Prime is targeting a net debt to underlying EBITDA ratio of 2.0 – 2.5 times over the next 12
Slide 11: Dividends
Dividends For personal use only Dividends to be paid from operating cashflow Target dividend payout ratio of 40 - 60% of reported and maintainable EPS 1H19 interim dividend of 0.20 cents per share (‘cps’) (fully franked) versus interim dividend of 0.45 cps in 1H18. Retaining cashflow to fund growth
Slide 12: Regulatory – Hayne Royal Commission
Regulatory – Hayne Royal Commission For personal use only Prime supportive of transparent and open process Net positive for Prime’s business, advice and growth model Prime has less than 3% of Wealth Management revenue from Grandfathered Commissions Opt-in for client ongoing service arrangements to a
Slide 13: Key Points & Outlook
Key Points & Outlook For personal use only Positive growth outlook as one consolidated and integrated firm Organic revenue growth from new services and past acquisitions materialising Integration prioritised over acquisition in following 12 months 100% owned and operated full-service firm across Mel
Slide 14: Contact
Contact For personal use only Simon Madder Managing Director/CEO Prime Financial Group Ltd (03) 9827 6999 simonm@primefinancial.com.au www.primefinancial.com.au Rory McLaughlin Group Financial Controller Prime Financial Group Ltd (03) 9827 6999 rorym@primefinancial.com.au www.primefinancial.com.au B
Slide 15: Appendices
For personal use only Appendices
Slide 16: Who We Are (1)
Who We Are (1) For personal use only Service Purpose Operations • Integrated Accounting & Business • Advise investors, business owners and • 90+ team members primarily across Advisory, Wealth Management, including entrepreneurs on realising their Melbourne, Sydney and Brisbane SMSF and Capital Servi
Slide 17: Who We Are (2) – Prime's Capital Structure
Who We Are (2) For personal use only Prime’s Capital Structure Shares on issue (includes treasury shares) at 31 December 2018 191.0 million Market Capitalisation at $0.095 at 25/02/19 closing $18.1 million Net debt at 31 December 2018 $9.8 million 62% Prime’s comparable companies Company ASX Code Ma
Slide 18: What We Do
What We Do For personal use only Prime operates a direct client advice model under the Prime brand and a Joint Venture model with accounting firms (co-branded). 80% of total revenue is generated from existing customers. Wealth Management Accounting & Business Advisory plus Capital • Financial & Reti
Slide 19: Typical Clients
Typical Clients For personal use only Accounting & Wealth Management Capital Advisory Business Advisory • Start-ups, Scale-ups and established • Mass affluent with $100k - $1 million of • Emerging to mid market companies businesses with $1 million - $30 investible assets with a value up to $300 mill
Slide 20: Strategic Plan
Strategic Plan For personal use only Purpose: Advise investors, business owners and entrepreneurs on realising their aspirations, protecting and growing their wealth and accessing capital Goal: To be the leading integrated advice firm of the future How: Helping our clients and business partners acce
Slide 21: Acquisition & Divestment Strategy
Acquisition & Divestment Strategy For personal use only STRATEGY Expand and integrate current operations, Prior to FY17, Prime’s strategy was Continued focus on Melbourne, utilising scale and existing capabilities. to acquire minority equity interests Sydney and Brisbane core hubs Selectively acquir
Slide 22: Core Hub Strategy: Melbourne, Sydney & Brisbane
Core Hub Strategy: Melbourne, Sydney & Brisbane For personal use only Division HUB FY17 FY18 FY19 Satellite Office – Cairns MPR acquisition (100%) • Wealth Management MEL Core Hub – Brisbane Accounting SYD Key service opportunity • Accounting & Business & Business Advisory Advisory Altezza acquisiti
Slide 23: Experienced Board
Experienced Board For personal use only Simon Madder Paul Cowan Peter Madder Tim Carroll Chief Executive Officer & Independent Non-Executive Executive Director Independent Non-Executive Managing Director Chairman Director Co-founder, Managing Director & Executive Director River Capital Previously Ma
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