Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — FY2023 Earnings Presentation
29 slides from Centrepoint Alliance's earnings presentation, Aug 23, 2023
Slide 1: FY23 Results Presentation and Strategy Update
FY23 RESULTS PRESENTATION AND STRATEGY UPDATE John Shuttleworth, CEO Brendon Glass, CFO August 2023
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 twelve months ending 30 June 2023 and the Appendix 4E lodged with the Australian Securities Exchange by Centrepoint Alliance Limited (ASX:CAF) on 23 August
Slide 3: Agenda
AGENDA BUSINESS RESULTS John Shuttleworth, CEO FINANCIAL RESULTS Brendon Glass, CFO STRATEGY UPDATE & OUTLOOK John Shuttleworth, CEO
Slide 4: Business Results
BUSINESS RESULTS John Shuttleworth, CEO
Slide 5: Key highlights for FY23
Key highlights for FY23 The Group is well • Strong FY23 result with revenue and profit growth positioned with • Strong balance sheet strong earnings and • Final dividend 2 cents (full year 3 cents) balance sheet to capitalise on the • Clear number three in the market positive changes • Scalable and
Slide 6: Snapshot of FY23 results
Snapshot of FY23 results $271.6m $7.6m $32.5m Gross revenue EBITDA (normalised) Gross profit Excludes asset sales, $43m LTI and one-off costs $1.3m +19% $0.4m +4% on FY22 +5.6% on FY22 on FY22 $6.6m $15.6m Dividend Fully franked to be paid Profit before tax Cash 29 Sept 2023 2¢ + at 30 June 2023 $4m
Slide 7: Adviser numbers have stabilised and there are 'green shoots'
Adviser numbers have stabilised and there are ‘green shoots’ CHANGE IN AR NUMBERS1 500 Appointments Terminations Net Growth 15,595 AR numbers have 21,233 0 stabilised in the last 3 quarters (after large falls for the -500 prior 16 quarters) Professional -1000 Year graduate numbers are growing PY GRA
Slide 8: Centrepoint has performed strongly over the last two years relative to peers
Centrepoint has performed strongly over the last two years relative to peers and is now the number 3 licensee in the market based on adviser rankings CHANGES IN ADVISER NUMBERS BY LICENSEE 1/7/2021 TO 30/06/2023 NUMBER NET 1 RANK LICENSEE GROUP OF ARS APPOINTMENTS RESIGNATIONS CHANGE 1 Insignia 975
Slide 9: Service response times and consistency continue to improve
Service response times and consistency continue to improve AVERAGE DAYS AVERAGE DAYS Response times have improved by TO CLOSE TO CLOSE 27% year on year SERVICE AREA FY22 FY23 60% of cases resolved within 1 day Advice revenue processing 1.54 1.35 – 12% improvement year on year Education 3.25 2.37 Cas
Slide 10: Our focus on service has increased adviser satisfaction
Our focus on service has increased adviser satisfaction NET PROMOTOR SCORES BY CHANNEL Aug-22 Dec-22 Mar-23 40 33 35 NPS adviser feedback drives service 30 27 24 26 enhancements like 19 case tracking on 20 Salesforce, digital 13 13 forms and practical 10 compliance 0 -10 -13 -20 Total NPS responses
Slide 11: Recruitment pipeline is strong and firm attrition is negligible
Recruitment pipeline is strong and firm attrition is negligible APPOINTMENTS FY23 New Firms - ARs SELF- Existing - ARs LICENCED LICENCED Growth in FY23 (ARs) (FIRMS) evenly balanced 52% 64 48% between existing firms growing and Pipeline 271 93 recruiting new firms Onboarding/ 15 5 TERMINATIONS FY23
Slide 12: Data management, privacy and data security to safeguard client data
Centrepoint places paramount importance on both data management, privacy and data security to safeguard client data DATA MANAGEMENT PRIVACY DATA SECURITY CAF ADVISER PRACTICES CAF IT INFRASTRUCTURE Mandated cyber measures for Azure cloud environment with practice IT and Infrastructure web/filtering
Slide 13: Financial Results
FINANCIAL RESULTS Brendon Glass, CFO
Slide 14: Financial results summary
Earnings momentum continues post successful integration of ClearView Advice acquisition Financial results summary FY21 FY221 H1 FY23 H2 FY23 FY23 • Gross revenue up $43.1m (+19% PCP) driven by For the period ($m) ($m) ($m) ($m) ($m) $22.4m organic licenced adviser growth and Gross Revenue 139.2 228.
Slide 15: Gross Profit and expense analysis
Annuitised adviser fees uplift, CVA acquisition and continued expense management drive earnings increase Gross Profit and expense analysis Gross Profit movement ($m) Key revenue movements (PCP) : $1.3 $2.5 $3.1 $32.5 • Adviser fees up $1.3m with newly recruited advisers $31.2 transitioning to full r
Slide 16: Balance Sheet
Strong cash position and debt-free balance sheet BALANCE SHEET FY22 FY23 • Cash of $15.6m up $0.9m from June 2022 primarily due to For the period ended $4.8m net cash inflows offset by $3.9m dividends paid ($m) ($m) • Claims provisions: 16 open claims (FY22: 11). Excluding nil Cash 14.7 15.6 value c
Slide 17: Cash movement
Strong cash performance generating $7.6m in gross cash from operations Cash movement • FY23 Gross Cash from operations $7.6m • One-Off Costs redundancies from CVW acquisition and M&A • Working capital trade receivable/trade payable movements of $2.7m • Ventura asset sale $1.5m in July 2022 • Dividen
Slide 18: Financial Snapshot
Cash leverage, debt free, growing shareholder returns, immaterial credit risk and nominal claims risk Financial Snapshot Expense Management FY21 FY22 FY23 Balance Sheet FY21 FY22 FY23 Headcount FTE 90.1 104.1 100.3 Closing Cash $11.1m $14.7m $15.6m Employment Cost Ratio1 60% 52% 52% Net Tangible Ass
Slide 19: Strategy Update & Outlook
STRATEGY UPDATE & OUTLOOK John Shuttleworth, CEO
Slide 20: Revenue opportunities the CAF advice network generates across the value chain
Context – revenue opportunities the CAF advice network generates across the value chain are significant CURRENT EARNINGS FUNDS UNDER ADVICE ~ $2B VALUE CHAIN REVENUE Adviser fee revenue $446M • Advice fee $2,900 $32.5m • 154,000 x $2,900 = $446M Gross profit $64B FUA Platform revenue • Platform reve
Slide 21: Our strategy is to grow the adviser network and expand our service offering
Our strategy is to grow the adviser network and expand our service offering Lending Advice services technology Two key elements for our strategy Virtual Admin 1,308 Para- 1. Continue to grow our network of advisers planning Service financial advisers $64B under advice 2. Build revenue adjacencies by
Slide 22: Lending as a Service has been enthusiastically embraced by advice firms
Lending as a Service (‘LaaS’) has been enthusiastically embraced by advice firms ABOUT LaaS 30 firms participating, 27 firms in pipeline A unique solution for advisers to deliver credit advice to clients Leads averaged 45 per month in June Quarter • Enable advisers to build a lending business by ope
Slide 23: Managed accounts are a highly efficient portfolio solution for advisers and clients
Managed accounts are a highly efficient portfolio solution for advisers and their clients MANAGED ACCOUNTS OVERVIEW ADVISER BENEFITS • Non-unitised managed investment • Highly efficient • Diversified portfolios • Investment decisions made by professional • Professionally managed manager • Separately
Slide 24: Strategy to grow managed accounts
Strategy to grow managed accounts Over the last 12 months the focus has been strengthening governance and developing a range of separately managed accounts that will be distributed on partner platforms INVESTMENT MANAGEMENT ROADMAP f Launched Launching a Strengthened managed Current asset new range
Slide 25: We are very positive about the business outlook
We are very positive about the business outlook Business is in good shape – integration complete, uniform pricing and efficient operating model Industry attrition of advisers has bottomed out post FASEA and showing signs of growth Regulatory change has shifted to practical changes to reduce complian
Slide 26: Appendices
CENTREPSGINT ALLIANCE APPENDICES
Slide 27: Positive regulatory changes from the Quality of Advice Review
Positive regulatory changes from the Quality of Advice Review will improve productivity for advisers MEASURE IMPLICATION FOR ADVISERS IMPLICATION FOR CLIENTS Replace Statement of Reduce time spent producing advice Clear, concise advice documents that Advice with more 'Fit documents increasing advise
Slide 28: Centrepoint Alliance business composition
Centrepoint Alliance business composition 1. 2. 3. 4. LICENSEE LENDING INVESTMENT TECHNOLOGY SOLUTIONS SOLUTIONS MANAGEMENT SOLUTIONS Everything an adviser Everything a broker Managed portfolios Technology services to needs to run an advice needs to run a mortgage improve the efficiency practice bro
Slide 29: Corporate snapshot
Corporate snapshot EXPERIENCED AND INVESTED CAPITAL STRUCTURE LEADERSHIP TEAM TOP SHAREHOLDERS ASX stock code CAF Shares held Investors Board & Management Role As at 17/07/23 As at 17/07/2023 Shares held (% of SOI) FY23 gross revenue $271.6m Mr Alan Fisher Non-Executive Chairman - Thorney Investment