Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — FY2019 Earnings Presentation
30 slides from Centrepoint Alliance's earnings presentation, Aug 22, 2019
Slide 1: FY19 Annual Results
FY19 ANNUAL RESULTS Results Presentation and Strategy Update Angus Benbow, CEO 22 August 2019
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 2019 and the Appendix 4E lodged with the Australian Securities Exchange by Centrepoint Alliance Limited (ASX:CAF) on 22 Augu
Slide 3: Summary
SUMMARY Financial Results Strategy Update Outlook • PBT $1.2m, up from ($3.4m) loss • Clear strategy, with 12 months of • Industry dislocation provides focussed delivery opportunity to grow market share • EBITDA $2.4m, up from ($1.6m) loss • Compelling value proposition • Investing in technology and
Slide 4: Financial results
Financial results 4
Slide 5: FY19 Financial Results
FY19 FINANCIAL RESULTS Total • Profit before tax of $1.2m, turning around loss of $m FY18* FY19 $3.4m in FY18 Gross Profit 32.3 30.7 • Revenue reduction from accelerated rebate Management Expenses (28.5) (28.1) runoff. New revenue model in place from 1 July EBITDA (excluding legacy claims) 3.8 2.6 2
Slide 6: Cash Flow
CASH FLOW FY19 Cash Movement ($m) • Closing cash position of $7.9m $1.2 ($0.6) ($4.1) • $3.2m cash flow from Operations $3.2 • Neos Life divested December 2018 and $9.5 ($1.3) returning capital as scheduled $7.9 • Software investment of $1.3m to improve scale and service experience for advisers Open
Slide 7: Group Balance Sheet
GROUP BALANCE SHEET $m FY18* FY19 • Maintaining strong balance sheet through transition Cash & Term Deposits 9.5 7.9 Loans Receivable 6.9 6.6 • Loans receivable includes $5.8m from Neos, of Claims Provision 5.4 1.3 which $2.5m is scheduled to be repaid by June 2020 Net Assets 19.0 16.9 Net Tangible
Slide 8: Strategy update
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Slide 9: Focus Recreate Grow
CENTREPOINT AIMS TO BE THE LEADING PROVIDER OF ADVICE AND BUSINESS SERVICES TO THE FINANCIAL ADVISER COMMUNITY STRATEGIC REFRESH, AUGUST 2018 RECREATE GROW FOCUS Recreate a new offer that will Grow differently and Focus on our community of aggressively to build scale position Centrepoint as a advise
Slide 10: Strategy launched months ago and progressing strongly
STRATEGY LAUNCHED 12 MONTHS AGO AND PROGRESSING STRONGLY 1H FY19 2H FY19 ✓ Conduct portfolio review of businesses ✓ Introduce new governance and standards framework ✓ Implement new organisation structure FOCUS ✓ Build new relationship Service Model ✓ Launch education transition support model ✓ Harne
Slide 11: We provide key services that advisers need
WE PROVIDE KEY SERVICES THAT ADVISERS NEED GOVERNANCE BUSINESS MANAGEMENT SERVICES SERVICES New AFSL Setup Business Coaching Governance & Compliance Acquisition & Succession Responsible Manager Training Partnered Services Licensee Reviews Dashboard Reporting File Audits HR Support Advice Policy & Pr
Slide 12: Case study: governance services provide licence to operate
CASE STUDY: GOVERNANCE SERVICES PROVIDE LICENCE TO OPERATE Licensee must operate efficiently, honestly and fairly* PROVISION OF LICENCE QUALIFICATIONS CONTINUING EDUCATION PROFESSIONALMEMBERSHIPS MONITORING AND SUPERVISION • Register with ASIC • FASEA • Development and • Mandatory • Establish codes
Slide 13: Case study: advice services enable provision of advice
CASE STUDY: ADVICE SERVICES ENABLE PROVISION OF ADVICE 1 2 Client meeting 4 Product selection 6 8 Lead generation Implementation Ongoing advice • Website & blogs • Coaching to structure • Regular training to • Standards ensure • Customised client • Education guides goals-based discussion enable appr
Slide 14: New fee model is transparent and based on services provided
NEW FEE MODEL IS TRANSPARENT AND BASED ON SERVICES PROVIDED Core service package fees for licensed advisers Variable service fees A range of variable services are available Past: Subsidised fees Future: Transparent fees in addition to core package Average fees per adviser ($’000) Average fees per ad
Slide 15: Take-up of fee based service offer is encouraging
TAKE-UP OF FEE BASED SERVICE OFFER IS ENCOURAGING Licensed firms and advisers 86% of firms retained 80% growth of new advisers Record quarter for recruitment Firms offered FY20 fees* Advisers won/lost in FY19 New recruited advisers in FY19 30 80% 68 Fees announced 32 Organic in March 22 growth 25 38
Slide 16: Outlook
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Slide 17: Industry dislocation is accelerating and provides opportunity to grow market share
INDUSTRY DISLOCATION IS ACCELERATING AND PROVIDES OPPORTUNITY TO GROW MARKET SHARE Unprecedented industry change Focus on growing market share Proactive leadership position in support of Advisers impacted by closures & strategy changes advisers 4,900 • Clear offer & transparent fees Recent Announcem
Slide 18: We will launch our fee-based offer for self-licensed advisers in FY20
WE WILL LAUNCH OUR FEE-BASED OFFER FOR SELF-LICENSED ADVISERS IN FY20 Growth of self-licensed segment is accelerating Unique offer for self-licensed firms Net annual adviser transfers per channel 536 Providing quality advice Running your business GOVERNANCE BUSINESS 261 SERVICES MANAGEMENT SERVICES
Slide 19: Investing in technology and data to enable greater scale and superior service
WE ARE INVESTING IN TECHNOLOGY AND DATA TO ENABLE GREATER SCALE AND SUPERIOR SERVICE New adviser portal Centrepoint Adviser Intelligence (Centrepoint.AI) • Intuitive portal providing access to more than 700 essential • Unique proprietary data-driven practice management policies and documents dashboa
Slide 20: We have a clear program for delivery in FY20
WE HAVE A CLEAR PROGRAM FOR DELIVERY IN FY20 FOCUS RECREATE GROW FY 1H FY Support financial advisers Launch new self-licensed offer Grow share in disrupted industry FY 1H FY Grow revenue from variable Embed new service offer Digital content experience services FY 1H FY Build internal capability Buil
Slide 21: Summary
SUMMARY Financial Results Strategy Update Outlook • PBT $1.2m, up from ($3.4m) loss • Clear strategy, with 12 months of • Industry dislocation provides focussed delivery opportunity to grow market share • EBITDA $2.4m, up from ($1.6m) loss • Compelling value proposition • Investing in technology and
Slide 22: Appendices
Appendices 22
Slide 23: Centrepoint's Advice Network
CENTREPOINT’S ADVICE NETWORK 769 (QLD) Self Licensed 578 Corp – Licensed 118 Salaried 2 123 (WA) Mortgage Brokers 71 Self Licensed 94 Corp – Licensed Salaried 28 0 493 (NSW) Self Licensed 388 Mortgage Brokers 1 Corp – Licensed 57 Salaried 2 198 (SA) Mortgage Brokers 46 Self Licensed 160 Corp – Licen
Slide 24: Centrepoint's Experience
CENTREPOINT’S EXPERIENCE Fit for purpose Governance & compliance capability founded on hard lessons Culture & capabilty aligned to new world of advice Professional Centrepoint acquired • Contemporary business model enables advisers to Investment Services Professional Strategic Refresh select the pro
Slide 25: Firm Segment Analysis
FIRM SEGMENT ANALYSIS Firms AR's Firms Firms Firms AR's YTD Firms YTD AR's Key Performance Indicator FY18 FY18 Ceased New Jun 19 CLOSE Jun 19 CLOSE Variance Variance Corporate Licensed 240 338 (58) 33 215 300 (25) (38) Self Licensed (1-50 advisers) 230 986 (12) 7 225 1,138 (5) 152 Self Licensed (50+
Slide 26: Prior Period Comparative Adjustments
PRIOR PERIOD COMPARATIVE ADJUSTMENTS 30 Jun 2018 30 June 2018 • During the year, it was identified that a $m previously Adjustment reported restated receivable from scheme participants of the Centrepoint Alliance Employee Share Plan Condensed consolidated recognised in the 31 December 2017 and the 3
Slide 27: FY19 Operating Segment Results
FY19 OPERATING SEGMENT RESULTS Funds Management and Administration Licensee and Advice Services Corporate Total FY18* FY18* FY18* FY18* $m FY19 FY18 v FY19 FY19 FY18 v FY19 FY19 FY18 v FY19 FY19 FY18 v FY19 restated restated restated restated Statutory Revenue 12.1 13.1 8% 110.4 104.0 -6% 0.7 0.3 -5
Slide 28: Grandfathered Rebates
GRANDFATHERED REBATES $m FY18 1H19 2H19 FY19 • Strategic Refresh began in August 2018 to address phase out of rebates and replace with a Total Rebate 13.1 6.2 5.3 11.5 new sustainable revenue model Insurance Rebate 3.8 1.6 1.1 2.7 9.3 4.6 4.2 8.8 • Grandfathered platform rebates will be fully Platfo
Slide 29: Review of Legacy Claims and Adviser Service Fees
REVIEW OF LEGACY CLAIMS AND ADVISER SERVICE FEES Legacy Claims Adviser Service Fees • No significant new legacy claims during FY19 • Good progress on proactive review of historical adviser service fees. Expected completion FY21 • $1.3m provision held at 30 June 2019, largely for matters provisioned
Slide 30: Definitions
DEFINITIONS Term Definition AML & CTF Anti Money Laundering & Counter Terrorism Financing Basic EPS Basic Earnings per Share is NPAT divided by average number of ordinary shares Includes assets and revenue in respect of self-licensed firms, Salaried Advice, Licensed Practices (flat fee model), Open