Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — FY2013 Earnings Presentation
25 slides from Centrepoint Alliance's earnings presentation, Sep 3, 2013
Slide 1: Annual Results 30 June 2013
For personal use only Annual Results 30 June 2013 John de Zwart – Managing Director Linda Kaddatz – Investor Relations T: +61 2 9921 6900 T: +61 7 5668 1008 E: jdezwart@cpal.com.au E: Linda.Kaddatz@centrepointwealth.com.au
Slide 2: FY13 Highlights
FY13 Highlights For personal use only • Strong growth in Premium Funding with volumes up 16% and EBITDA up 42% • Strong growth with Associated Advisory Practices licensees up 12% to 191 practices • The Wealth Products business comprising Ventura Funds Management and Investment Diversity platforms gr
Slide 3: Financial Highlights
Financial Highlights For personal use only FY13 FY12 % Change Underlying Profit $4.1m $5.8m (29%) Statutory Profit ($7.3m) ($17.3m) (58%) Total Revenue $52.6m $62.1m (15%) Total Expenses (excl claims) $49.3m $59.9m (18%) Cost to Income Ratio 0.94 0.96 (2%) Underlying EPS 4.2 cps 5.8 cps (27%) Premiu
Slide 4: Group Structure
Group Structure For personal use only Centrepoint Alliance Limited Wealth Funding Financial Advice Platforms and Funds Management Premium Funding Mortgage Broking Administration - Associated Advisory - Investment - Ventura Funds - Centrepoint Alliance - Australian Loan Practices* Diversity - AllStar
Slide 5: Wealth Market
Wealth Market Market For personal use only • Long term growth projected for the independent full advice market • Australians require comprehensive financial advice to navigate the complex tax, welfare, health and retirement savings regulatory environments • Advice space has been heavily institutiona
Slide 6: Wealth Strategy
6 For personal use only Wealth Strategy
Slide 7: Priorities
Priorities For personal use only • Prepare organisation and • Continue to build experienced • Support continued double advisers for FOFA (2H13) transformational management digit growth of Premium • Re-engage advisers (2H13) team (1H14) Funding, AAP and Wealth • Enhance service to advisers • Integrat
Slide 8: Business Line Overview
Business Line Overview For personal use only Metric PBT Business 2013 2012 2013 2012 Funding Centrepoint Alliance Premium $368m premiums $317m $3.4m $2.4m Funding funded Australian Loan Company $563m new loans $629m new loans $0.4m $0.2m Financial Advice Associated Advisory Practices 191 practices 1
Slide 9: Business Line Overview
For personal use only Business Line Overview
Slide 10: Premium Funding – Operational Review
Premium Funding – Operational Review Clear focused strategy with excellent execution capability For personal use only Strong growth in premiums funded up 16% YOY Margins benefited from stable operating costs combined with falling interest rates. Profits up 42% Strong risk management. Bad debts relat
Slide 11: Premium Funding – FY13 Results
Premium Funding – FY13 Results For personal use only % FY13 FY12 Change • Double market growth in loan volumes Financial Results • Active broker numbers increased Revenue $m 14.6 13.1 11% Expenses $m 11.2 10.7 5% • Largest independent and number 3 in market PBT $m 3.4 2.4 42% • Average loan size dow
Slide 12: Associated Advisory Practices (AAP) – Operational Review
Associated Advisory Practices (AAP) – Operational Review Largest licensee service provider in the market. Client engagement is strong with high level of For personal use only new client referrals Strong growth in self licensed financial planning clients, up 12% to 191 at 30 June 2013. Increased to 2
Slide 13: Associated Advisory Practices – FY13 Results
Associated Advisory Practices – FY13 Results For personal use only FY13 FY12 % Change • Revenue growth of 6% less than licensee growth of 12% due to Financial Results loss of two significant clients and being replaced with smaller Revenue $m 5.2 4.9 6% clients Expenses $m 2.5 1.8 40% • FY13 profit i
Slide 14: Professional Investment Services – Operational Review
Professional Investment Services – Operational Review Adviser losses have been stemmed in the final months of FY13 following aggressive competitor For personal use only activity and inadequate care given to client relationships Significant investment in systems and processes in preparation for FOFA
Slide 15: Professional Investment Services – FY13 Results
Professional Investment Services – FY13 Results For personal use only FY13 FY12 % • Significant reduction in practices Change impacted advice revenue Financial Results • Revenue from product rebate Revenue $m 24.3 33.9 (28%) margins also impacted by loss of Expenses (ex claims $m 25.5 32.5 (21%) adv
Slide 16: Wealth Products: Platforms and Funds – Operational Review
Wealth Products: Platforms and Funds – Operational Review Business model is to select leading platform (IDL) and investment management (Ventura and For personal use only AllStar) services, and construct and coordinate the distribution of differentiated ‘white labelled’ alternatives to generate const
Slide 17: Wealth Products – FY13 Results
Wealth Products – FY13 Results For personal use only • Strong net inflows onto platforms FY13 FY12 % Change combined with favorable investment markets lifted FUA by Financial Results 18% Revenue $m 6.5 5.6 16% • Good cost control enabled profit Expenses $m 4.0 3.7 11% growth of 32% PBT $m 2.5 1.9 32
Slide 18: Group FY13 Results – Corporate & Other
Group FY13 Results – Corporate & Other For personal use only FY13 FY12 % Change • Includes costs of maintaining listed parent Financial Results entity, including board of Revenue $m 2.0 (0.3) - directors, CEO, corporate secretarial and group Expenses $m 5.9 6.2 (6%) finance function PBT $m (3.9) (6.
Slide 19: Centrepoint Group - FY13 Results
Centrepoint Group - FY13 Results Consolidated Group Financial Performance ($m) FY13 FY12 % Change For personal use only Financial Results Items within the Underlying Revenue 52.6 62.1 (15%) Profit reconciliation include: EBITDA (4.7) (12.0) (61%) • PIS client claims costs Interest, Depn, Amortisatio
Slide 20: Legacy Claims
Legacy Claims For personal use only Legacy claims provision is $20.8m at 30 June 2013, compared to $20.9m at 31 December 2012 and $22.1m at 30 June 2012 The provision is related to advice given during the period prior to Centrepoint taking control of Professional Investment Services in 2010 The prov
Slide 21: Legacy Claims
Legacy Claims For personal use only The claims movement in 2H13 was due to: $m Revisions to open claims liability at 31/12/12 – Note 1 3.0 Inflation and discount unwind 0.4 Over run of legal expenses 0.4 Net other factors eg. number of claims, claims size (0.1) Sub-total change in external actuary a
Slide 22: Outlook
Outlook • Continued steady market growth in both Wealth and Funding markets For personal use only • Continued strong performances and market share growth in Premium Funding and AAP • Strong growth in Wealth Products particularly from aligned practices • Completion of the AAP schemes and move to 100%
Slide 23: Appendices
For personal use only Appendices
Slide 24: Cash Flow Analysis
Cash Flow Analysis For personal use only Cash Flows from Operating Activities - $m FY13 FY12 % Change Cash receipts from customers 172.0 204.7 (16%) Cash paid to suppliers and employees (159.6) (200.1) (20%) Cash provided by operations 12.4 4.6 171% Claims and litigation settlements (11.3) (11.2) 1%
Slide 25: Balance Sheet
Balance Sheet $m FY13 FY12 For personal use only Assets • Group retains significant uncommitted Cash 9.3 14.6 cash balance Interest Bearing Recbles (IBR) 108.2 96.3 • Growth of premium funding reflected in Trade & Other Receivables 13.8 24.4 increases in Interest Bearing Receivables and Interest Bea