Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — FY2014 Earnings Presentation
24 slides from Centrepoint Alliance's earnings presentation, Aug 22, 2014
Slide 1: Annual Results 30 June 2014
For personal use only Annual Results 30 June 2014
Slide 2: FY14 Summary
FY14 Summary • For personal use only Underlying pre-tax profit up 43% to $8.3m, statutory profit up 142% • Strong performance from Centrepoint Funding • Centrepoint Wealth repositioned with new strategy and executing well • Heavily over-subscribed capital raising • Strong governance and risk managem
Slide 3: Results highlights
Results highlights Financial • Underlying profit before tax $8.3m, up 43% For personal use only • Cost reductions in Centrepoint Wealth offset prior period lost revenue and allowed for investment in new capabilities and systems • Premium Funding loan volumes up 21% to $445m • Strong underlying opera
Slide 4: Financial summary
Financial summary For personal use only FY14 FY13 Change Financial Highlights Underlying PBT $8.3m $5.8m 43% • Underlying profit growth from consistently good performances Statutory NPAT $3.3m ($7.8m) 142% across all teams Total Revenue1 $51.7m $52.6m (2%) • Statutory NPAT up 142% due to Total Expen
Slide 5: Centrepoint's vision
Centrepoint’s vision For personal use only To be the most respected financial services business in Australia By: • Delivering consistent, reliable and valued outcomes for clients and customers • Having experienced, aligned people who want to deliver the best and who have the resources to deliver • H
Slide 6: Attractive markets with strong positions
Attractive markets with strong positions Non-Bank Funding Market Wealth Market For personal use only Premium Funding • Australian superannuation market of $1.8 trillion expected to grow at an average of 8% pa over the • $5bn premium funding market growing at a next 20 years long term avg rate of 5%
Slide 7: Centrepoint's proposition
Centrepoint’s proposition For personal use only Funding Centrepoint Group Wealth Customer Customer Customer • Quick and easy • Great experiences • Peace of mind • Quality, reliable outcomes • Low risk/volatility • Maximise retirement financial outcomes Brokers Clients Adviser / Accountant • Strong r
Slide 8: Profit summary
Profit summary For personal use only Segment FY14 FY13 Change Summary Centrepoint Wealth $6.5m $6.7m (3%) • Centrepoint Wealth stabilised and positioned for growth. Prior Centrepoint Funding $5.3m $3.7m 43% period lost revenue offset by operational efficiencies in FY14 Corporate ($3.5m) ($4.6m) 24%
Slide 9: Centrepoint Funding highlights
Centrepoint Funding highlights For personal use only Financial • Underlying PBT up 43% to $5.3m • Premiums funded up 21% to $445m and growing at circa three times market • Premium Funding’s east coast sales up 43% YOY • Mortgage broking PBT up 2% to $0.2m Operating • Operational efficiencies continu
Slide 10: Centrepoint Funding results
Centrepoint Funding results For personal use only FY14 FY13 Change Summary • Active general insurance brokers up Revenue $18.6m $16.0m 16% 31% - underpins future growth Expenses ($13.3m) ($12.3m) 8% • FY14 premiums funded up 21%. Underlying PBT $5.3m $3.7m 43% Revenue growth at 16% as a result of lo
Slide 11: Centrepoint Wealth highlights
Centrepoint Wealth highlights Financial • Underlying profit flat at $6.5m and statutory PBT up 149% For personal use only • Prior year revenue reductions offset by operational efficiency program • $6m in annualised savings achieved, partially offset by new investments Operating • Significant investm
Slide 12: Centrepoint Wealth results
Centrepoint Wealth results For personal use only FY14 FY13 Change Summary • Revenue lower due to reduced Revenue $32.5m $35.9m (10%) number of advisers partially offset Expenses ($25.9m) ($29.2m) (11%) by favourable markets Underlying PBT $6.5m $6.7m (3%) • Expense reductions fully factored into 2H1
Slide 13: Centrepoint Wealth plan and priorities
Centrepoint Wealth plan and priorities Grow For personal use only 2014-15 onwards Position for Growth • Strengthen brand and grow 2014-15 awareness (ongoing) • Support practices build high Stabilise • Build experienced quality sustainable businesses (ongoing) 2013-14 transformational management team
Slide 14: Corporate
Corporate For personal use only FY14 FY13 Change Summary • Revenue is primarily interest income Revenue $0.4m $0.1m 300% • Underlying expenses down 17% on Expenses ($3.9m) ($4.7m) (17%) reduced use of external professionals Underlying PBT ($3.5m) ($4.6m) 24% • Expenses include CEO, Finance Restructu
Slide 15: Capital management
Rapital management C For personal use only Key initiatives in 2014: • Strengthen financial position of the group i.e. $13.6m capital raising, ensure all business lines profitable, exit non-core assets, simplify business • Secure short and longer term funding lines i.e. NAB refinancing, second lender
Slide 16: Debt management
Rebt management D For personal use only • Refinanced nab receivables funding in July 2013 for 18 months • Significant increase in funding lines to $145m with improved terms, lower capital requirements and margin • NAB review and refinancing progressing positively • Second funder negotiations well pr
Slide 17: Resumption of dividends
Resumption of dividends For personal use only • The Board has declared a final dividend for FY14 of 2.2c per share fully franked • Record date is 26 September 2014 with payment on 15 October 2014 • There is no dividend reinvestment plan given the cash position and financial strength of the Group • T
Slide 18: Outlook
R Outlook For personal use only • All business lines expected to continued to perform strongly • Continue to build brand strength and awareness • Continued market share growth for premium funding offsetting low or falling general insurance premiums • Begin to leverage strength of Centrepoint Wealth’
Slide 19: Appendices
For personal use only Appendices Page 19 Investor Presentation, 22 August 2014
Slide 20: Group balance sheet
Group balance sheet FY14 FY13 Change Highlights For personal use only Cash and Term Deposits $21.4m $9.4m 128% • Strong cash position Interest Bearing Receivables $130.6m $107.6m 21% • Increase in assets due to growth of Premium Funding affecting both Other Current Assets $17.2m $16.7m 3% Interest B
Slide 21: Cash flows
Cash flows For personal use only FY14 FY13 Summary Source and use ($m) • Underlying cash flows of $9.1m Cash flows from operations $7.5m $12.5m • Gearing increased in premium Add Underlying PBT cash adjustments $1.6m $1.1m funding to boost return on equity Underlying cash from operations $9.1m $13.6
Slide 22: Legacy claims
Legacy claims For personal use only FY14 FY13 Change Opening balance $20.8m $22.1m ($1.3m) Claims provisioning expense during the period $1.9m $10.0m ($8.1m) Claims settlements & fees paid (net of recoveries) ($8.9m) ($11.3m) $2.4m Closing balance $13.8m $20.8m ($7.0m) • Legacy claims provision at 3
Slide 23: Tax benefits
Tax benefits For personal use only FY14 FY13 Summary Franking account balance as at year end $28.9m $28.0m • The company is in a position to begin unlocking its unrecognised (off Ability to fully frank future dividends $67.4m $65.3m balance sheet) tax assets Unrecognised Revenue Tax Losses $48.2m $4
Slide 24: Contact Details
For personal use only Contact Details: John de Zwart Glenn Toohey Managing Director Chief Financial Officer and Company Secretary Telephone: +61 2 8987 3002 Telephone: +61 2 8987 3033 Email: jdezwart@cpal.com.au Email: glenn.toohey@cpal.com.au Level 6, 2 Elizabeth Plaza Level 6, 2 Elizabeth Plaza No