Slide 1: FY20 Full Year Results presentation and strategy update
FY20 FULL YEAR Results presentation and strategy update Angus Benbow, Chief Executive Officer Brendon Glass, Chief Financial Officer 20 August 2020
Slide 2: Disclaimer
DISCLAIMER This presentation is for general information purposes only and should be read in conjunction with the Full Year Financial Report for the twelve months ended 30 June 2020 and the Appendix 4E lodged with the Australian Securities Exchange by Centrepoint Alliance Limited (ASX:CAF) on 20 Augu
Slide 3: Our purpose is to enable the Australian community's trust in financial advice
Our purpose is to enable the Australian community’s trust in financial advice, because good advice promotes wellbeing $131.0m 11% on FY19 $3.7m 12% on FY19 $25.6m 7% on FY19 $12.2m 54% on FY19 Gross revenue EBITDA (Excl. legacy claims) Expenses Cash (at 30 Jun 20) Core business New opportunities Rev
Slide 4: Business Results
BUSINESS RESULTS Angus Benbow, CEO
Slide 5: Solid progress in executing three-year strategic refresh
SOLID PROGRESS IN EXECUTING THREE-YEAR STRATEGIC REFRESH DESPITE INDUSTRY DISRUPTION AND COVID-19 FOCUS RECREATE GROW Core focus on providing services to Successful new adviser fee model: 79 new advisers joined licence, 49 new advisers during a turbulent 12 months • FY19 average Authorised Represent
Slide 6: Centrepoint Alliance is focused on supporting financial advisers
CENTREPOINT ALLIANCE IS FOCUSED ON SUPPORTING FINANCIAL ADVISERS THROUGH LICENSING, ADVICE AND BUSINESS SERVICES Market Licensee Self-licensed Wholesale Licensee segments Core business Extension New offer Definition Large licensee for individual advice Service provider for small self-licensed Licens
Slide 7: National advice and business services firm with a scalable core offer
CENTREPOINT ALLIANCE IS A NATIONAL ADVICE AND BUSINESS SERVICES FIRM WITH A SCALABLE CORE OFFER 613 (QLD) Self Licensed 423 85 (WA) Corp - Licensed 132 Self Licensed 64 Salaried 2 Corp - Licensed 20 Mortgage Brokers 56 Salaried 0 Mortgage Brokers 1 402 (NSW) Self Licensed 284 Corp - Licensed 66 160
Slide 8: Services and licensee solutions required to operate as a financial adviser
THE COMPANY PROVIDES THE SERVICES AND LICENSEE SOLUTIONS REQUIRED TO OPERATE AS A FINANCIAL ADVISER GOVERNANCE BUSINESS MANAGEMENT SERVICES SERVICES New AFSL Setup Business Coaching Governance & Compliance Acquisition & Succession Responsible Manager Training Partnered Services Licensee Reviews Dash
Slide 9: 83% of advisers satisfied with Centrepoint Alliance
83% OF ADVISERS SATISFIED WITH CENTREPOINT ALLIANCE Centrepoint Alliance has strong satisfaction levels in the areas A recent independent survey of Centrepoint Alliance’s that adviser’s value most from their Licensee adviser base shows strong satisfaction with our offering Top three factors from Cor
Slide 10: New 'fee for service' revenue model introduced
NEW ‘FEE FOR SERVICE’ REVENUE MODEL INTRODUCED SUCCESSFULLY FROM 1 JULY 2019 FOR LICENSED ADVISERS New fee model for licensed advisers Quarterly transition through FY20 71% retention of firms since FY18 Actual Avg annualised fees Advice firm retention over last two Average fees per adviser ($’000) p
Slide 11: Underlying nature of advisers' businesses has changed
UNDERLYING NATURE OF ADVISER’S BUSINESSES HAS CHANGED THROUGH THE TRANSFORMATION AND GROWTH OF THE COMPANY Departed Stayed Joined Departed/ceased advisers Existing advisers that joined Onboarded advisers from since October 18 pre-October 18 Oct 18 to Dec 19 Fees as % of Significantly higher total re
Slide 12: Scalable service offering increasingly powered through data and technology
SCALABLE SERVICE OFFERING INCREASINGLY POWERED THROUGH DATA AND TECHNOLOGY Self serve platform leverages scale We have deepened our offer by developing unique tools and assets designed to help financial advisers gain insights and guidance faster GOVERNANCE BUSINESS SERVICES MANAGEMENT SERVICES Data
Slide 13: Record adviser growth despite market contraction and COVID-19
CENTREPOINT ALLIANCE EXPERIENCED RECORD ADVISER GROWTH, RECREAT GROW MARKET CONTRACTION AND COVID-19 HEADWINDS DESPITE 6% increase in AR numbers during FY20 Record year for recruitment Closing adviser numbers Advisers joined / departed 79 68 20 338 22 38 9 59 46 29 317 -52 -44 -75 -18 300 -34 -62 -3
Slide 14: Transformed base and grown strongly relative to peers
CENTREPOINT ALLIANCE HAS BOTH TRANSFORMED ITS BASE AND RECREAT GROW STRONGLY RELATIVE TO PEERS GROWN Centrepoint Alliance has added the third highest number of Market rationalisation has resulted in a 13% decline ARs to its Licence over the past two years compared to peers Number of Authorised Repre
Slide 15: Enzumo acquisition – scalable advice technology
ENZUMO ACQUISITION – SCALABLE ADVICE TECHNOLOGY RECREAT GROW SERVICES AND SOLUTIONS WITH LONG STANDING CLIENTS Service Proposition Client Statistics (average client tenure ~4.5 years) Comprehensive suite of advice delivery technology services Supporting Leading Financial Services Businesses 65 600+
Slide 16: Financial Results
FINANCIAL RESULTS Brendon Glass, CFO
Slide 17: Financial results summary
FINANCIAL RESULTS SUMMARY FY181 FY191 1H20 2H20 FY20 • Gross revenue up 11% to $131.0m, For the period ($m) ($m) ($m) ($m) ($m) driven by change in mix of underlying Gross Revenue 123.2 117.5 61.5 69.5 131.0 advice firms Adviser fees and commissions (90.9) (86.8) (47.4) (54.3) (101.7) • Gross profit
Slide 18: Revenue and expense analysis
REVENUE AND EXPENSE ANALYSIS Revenue movement ($m) $3.8 $3.3 Key revenue movements (PCP) : • Adviser Fee revenue up $3.8m with 17 net growth in advisers, and new adviser fee model successfully $30.7 $1.4 introduced $0.5 $29.3 • Rebate revenue down $3.3m due to runoff of grandfathered rebates and pri
Slide 19: Balance sheet
BALANCE SHEET FY19 FY20 • Cash from operations of $4.0m with $1.4m in escrow for settlement of For the period ended ($m) ($m) deferred tax payments due to COVID-19 Cash & Term Deposits 7.9 12.2 • Loans receivable reduced due to $2.5m Neos Life repayments; $2.0m to Trade and Other Receivables 9.2 7.8
Slide 20: Strategic Outlook
STRATEGIC OUTLOOK Angus Benbow, CEO
Slide 21: Industry disruption will continue to unfold, especially among smaller licensees
INDUSTRY DISRUPTION WILL CONTINUE TO UNFOLD, ESPECIALLY AMONG SMALLER LICENSEES, PROVIDING GROWTH OPPORTUNITIES Large licensees are growing adviser numbers Big 6 are exiting wealth Large Licensees Big 6 No of Licensees No of ARs Avg ARs Small licensees are fragmenting Self-licensed firms proliferate
Slide 22: FY21 strategic initiatives
CENTREPOINT ALLIANCE FY21 STRATEGIC INITIATIVES GROW RECREATE Complete Enzumo integration FOCUS Reconfigure the (AAP) self-licensed Create a tailored and distinct wholesale market offering and take to market offering for small and mid-sized Continue to attract and retain quality licensees advisers E
Slide 23: Well positioned to take advantage of strengthening tailwinds
CENTREPOINT ALLIANCE IS WELL POSITIONED TO TAKE FULL ADVANTAGE OF STRENGTHENING TAILWINDS FOR THE ADVICE INDUSTRY Regulation disruption easing Headwinds dissipating Transition towards advice as a profession well progressed Revenue model clarity Fundamental drivers of financial advice demand Tailwind
Slide 24: Contact details
CONTACT DETAILS Angus Benbow Tim Dohrmann Chief Executive Officer Investor Enquiries Centrepoint Alliance NWR Communications E: angus.benbow@cpal.com.au E: tim@nwrcommunications.com.au T: +61 2 8987 3016 M: +61 0468 420 846 Brendon Glass Suzanne Dwyer Chief Financial Officer Media Enquiries Centrepo
Slide 25: Appendices
CENTREPwINT ALLIANCE
Slide 26: Corporate snapshot
CORPORATE SNAPSHOT Capital structure Experienced and invested leadership team Top shareholders ASX Stock Code CAF Board & Management Role Shares held Investors Shares held (% of SOI) As at 23/7/20 As at 23/7/2020 FY20 gross revenue $131.0m Mr Alan Fisher Non-Executive Chairman - Thorney Investment G
Slide 27: Firm segment analysis
FIRM SEGMENT ANALYSIS Firms AR's New Firms Ceased Firms New AR's Ceased AR's Firms Close AR's Close Key Performance Indicator FY19 FY19 FY20 FY20 FY20 FY20 FY20 FY20 Corporate Licence 215 300 49 (36) 79 (62) 228 317 Self Licence (Normal) 225 1,138 12 (78) 261 (535) 159 864 • 61 firms recruited (Corp
Slide 28: Grandfathered rebates
GRANDFATHERED REBATES $m FY18 FY19 FY20 Key points Total Rebate 13.1 11.5 8.2 • Strategic Refresh began in August 2018 to move from a Insurance legacy funded revenue model to a new sustainable revenue 3.8 2.7 2.3 Rebate model, pre-empting legislative changes passed in October Platform Rebate 9.3 8.8
Slide 29: Centrepoint Alliance services – scalable advice platform
CENTREPOINT ALLIANCE SERVICES – SCALABLE ADVICE PLATFORM 29 Sources: Centrepoint Alliance internal service metrics (FY20).
Slide 30: Macro disruptive themes behind the strategic refresh remain relevant
THE MACRO DISRUPTIVE THEMES THAT FORMED THE BASIS OF THE STRATEGIC REFRESH ARE AS RELEVANT TODAY AS THEY WERE IN 2018 Financial advice Higher Community Relentless pace of Dramatic fall in number Solid momentum and Increased regulatory demand remains expectations on the digital and of Big 6 Advisers
Slide 31: Definitions
DEFINITIONS Term Definition AFCA Australian Financial Complaints Authority AFSL Australian Financial Services Licence APRA Australian Prudential Regulation Authority AR Authorised Representative of AFSL Licensee to provide financial advice ASIC Australian Securities and Investments Commission AW All