Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — FY2016 Earnings Presentation
29 slides from Centrepoint Alliance's earnings presentation, Aug 23, 2016
Slide 1: Full Year Results
For personal use only Full Year Results Centrepoint Alliance Limited 30 June 2016 ASX:CAF FY16 Investor Presentation, 23 August 2016
Slide 2: Our competitive advantage
Our competitive advantage • Centrepoint Alliance is uniquely positioned as a leader in Australia’s For personal use only contemporary financial advice industry ‒ early mover to service financial planners as a professional advice services business ‒ capturing the benefits from industry disruption and
Slide 3: Highlights
Highlights • Group EBITDA up 56% to $6.4m. Wealth EBITDA up 54% to $7.4m and Lending up For personal use only 13% to $2.7m • Centrepoint Alliance recruited 59 professional wealth advice firms, up 34% on the prior year • Centrepoint continues to lead the industry being an early promoter of Managed Ac
Slide 4: Group Financial Results
Group Financial Results 2H16 v FY16 v For personal use only $m 2H15 1H16 2H16 2H15 FY15 FY16 FY15 (%) (%) Revenue 63.6 64.6 65.8 3% 132.9 130.4 -2% Gross profit 19.1 21.4 20.1 5% 41.8 41.5 -1% EBITDA (0.2) 2.4 4.0 21x 4.1 6.4 56% Underlying Profit before tax 2.7 3.2 4.3 59% 7.0 7.5 7% NPAT 3.0 0.7 3
Slide 5: Operating Segment Results
Operating Segment Results Funds Management and For personal use only $m Licensee and Advice Services Wealth Lending Administration FY15 FY16 % FY15 FY16 % FY15 FY16 % FY15 FY16 % Revenue 11.0 11.4 4% 99.2 98.2 -1% 110.2 109.6 -1% 26.5 25.1 -5% Gross profit 6.0 6.7 12% 24.1 23.1 -4% 30.1 29.8 -1% 11.
Slide 6: Strong cash position
Strong cash position For personal use only • Strong cash position of $10m able to fund organic and inorganic growth • Operating net cash flow strengthened to $7.1m (2015: $6.5m) with improved operational performance • Adviser claim settlements significantly lower • Based on new bank loan covenants a
Slide 7: Dividends
Dividends • The Board has declared a final dividend For personal use only of 1.2 cents per share fully franked • Record date is 26 September 2016 with payment on 19 October 2016 • The Board have agreed not to offer the DRP due to strong cash position • There are distributable earnings of $19.5m and
Slide 8: Wealth
For personal use only Wealth 8 FY16 Investor Presentation, 23 August 2016
Slide 9: Integrated Wealth Strategy for Professional Advisers
Integrated Wealth Strategy for Professional Advisers • Centrepoint Academy - scalable on-line CPD training, technical services, For personal use only Leader in Non-Aligned conferences, professional education • Outsourced services – licensee services, compliance and practice Adviser Services administ
Slide 10: Benefiting from disruption and early adoption of Contemporary business model
Benefiting from disruption and early adoption of Contemporary business model For personal use only Traditional New world Dealer Group Centrepoint’s Value Chain Contemporary Fees position (bps) Model (bps) Direct Dealer 5-20 5-15 Moved to dollar based fee for service Group Fee Volume rebate 0 Managin
Slide 11: Funds Management and Administration
Funds Management and Administration 2H16 v FY16 v For personal use only $m 2H15 1H16 2H16 2H15 FY15 FY16 FY15 (% ) (% ) Revenue 5.6 5.7 5.7 2% 11.0 11.4 4% EBITDA 1.8 1.8 2.0 11% 3.1 3.8 23% Funds Under Management and 2,829 2,856 2,948 4% 2,829 2,948 4% Administration Gross Inflows 370 381 379 2% 78
Slide 12: Funds Management and Administration
Funds Management and Administration • Contemporary FUM/Admin grew 18% For personal use only YOY due to higher flows into partnered platforms and managed accounts • Pre FoFA funds and All Star funds in run-off • Contemporary revenue increased 24% due to support of managed accounts • Quality of revenu
Slide 13: Funds Management and Administration
Funds Management and Administration • Focus on growing quality For personal use only sustainable revenues from solutions designed for the needs of customers and independent advisers • 23% growth in EBITDA in FY16 $’M • Increasing Adviser support of Group solutions (48%) on lower gross inflows driven
Slide 14: Licensee and Advice Services
Licensee and Advice Services 2H16 v FY16 v For personal use only $m 2H15 1H16 2H16 2H15 FY15 FY16 FY15 (% ) (% ) Revenue 48.1 47.3 50.9 6% 99.2 98.2 -1% EBITDA -1.4 0.9 2.7 293% 1.7 3.6 112% New Firms 19 19 40 111% 44 59 34% Funds Under Distribution 7,955 8,067 7,738 -3% 7,955 7,738 -3% Agreements N
Slide 15: Licensee and Advice Services
Licensee and Advice Services • Strongly improved quality of our client firms For personal use only in FY16 • Good growth in new firms attracted by quality of Centrepoint’s service, product offering and people • There has been a significant shift to the Contemporary Business model due to growth in sa
Slide 16: Licensee and Advice Services
Licensee and Advice Services • Revenue base transforming to contemporary For personal use only business model to dollar based fee for service • Revenue base diversifying with salaried advice commencing late FY15 and emerging as revenue stream in FY16 • The quality and professionalism of Centrepoint
Slide 17: Lending
For personal use only Lending 17 FY16 Investor Presentation, 23 August 2016
Slide 18: Lending
For personal use only Lending • Despite challenging markets with commercial general insurance premiums falling for the 2nd year, team delivered strong results with EBITDA up 13% on prior year and 86% on 2H15 • Significant improvements implemented in pricing, funding and expense management • A number
Slide 19: Lending
For personal use only Lending • Distribution support continues to build with GI brokers up 11% and mortgage brokers up 13% • Significant improvements in technology and processes to improve the client and broker experience • Mortgage aggregator back office processing has been outsourced to improve ad
Slide 20: Lending
Lending • Maintained market share in a tough market. Industry statistics show a drop in commercial insurance For personal use only premiums of 6% [1] • Eastern states have continued to grow strongly. WA volume has declined due to competitor activity and a weak mining sector • Centrepoint remains the
Slide 21: Outlook
Outlook For personal use only • Centrepoint is strategically well positioned and benefitting from the disruption occurring across financial services as regulatory, technology and consumer driven change occurs • Centrepoint is ahead of the curve in creating a differentiated contemporary client centri
Slide 22: Disclaimer
Disclaimer This presentation is for general information purposes only and should be read in conjunction with the For personal use only Appendix 4E lodged with the Australian Securities Exchange by Centrepoint Alliance Limited (ASX:CAF) on 23 August 2016. This presentation does not provide recommenda
Slide 23: Contact Details
For personal use only CONTACT DETAILS John de Zwart John Cowan Managing Director Chief Financial Officer Telephone: +61 2 8987 3002 Telephone: +61 2 8987 3036 Email: jdezwart@cpal.com.au Email: john.cowan@cpal.com.au Level 9, 10 Bridge Street Level 9, 10 Bridge Street Sydney NSW 2000 Sydney NSW 2000
Slide 24: Appendix
For personal use only Appendix FY16 Investor Presentation, 23 August 2016
Slide 25: Group balance sheet
Group balance sheet For personal use only 25 FY16 Investor Presentation, 23 August 2016
Slide 26: Underlying Profit Reconciliation
Underlying Profit Reconciliation Change • Legacy claims expense relates to an For personal use only $m FY14 FY15 FY16 FY16 v increase in the provision for claims FY15 associated with advice provided pre-July Underlying Profit before Tax 8.3 7.0 7.5 7% 2010. FY16 is due to an unwinding of Legacy clai
Slide 27: Our advice network
Our advice network 4 For personal use only Self-Licenced 0 Corp-Licenced Salaried 0 0 702 259 TOTAL WEALTH Mortgage brokers 0 0 Self-Licenced Corp-Licenced 353 172 Self-Licenced 134 GI brokers 4 Salaried 1 TOTAL FUNDING 4 TOTAL WEALTH 526 Corp-Licenced 35 Salaried 0 Mortgage brokers 85 TOTAL WEALTH
Slide 28: Definitions
Definitions Term Definition The collective term for Funds under Distribution Agreements, Advice, Administration, Funds Management and Managed Portfolios For personal use only Includes assets and revenue in respect of self-licensed Firms, Salaried Advice, Licensed Contemporary Business Practices (fla
Slide 29: Definitions (continued)
Definitions (continued…) Term Definition Revenue* Gross revenue, excluding non-operational interest income For personal use only Direct Costs* Advice and financial product fees and borrowing expenses of the funding business Gross Profit Revenue less direct costs Operating Expenses Expenses excluding