Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — H1 FY2021 Earnings Presentation
27 slides from Centrepoint Alliance's earnings presentation, Feb 26, 2021
Slide 1: FY21 First Half Results presentation and strategy update
FY21 FIRST HALF Results presentation and strategy update Angus Benbow, Chief Executive Officer Brendon Glass, Chief Financial Officer 26 February 2021
Slide 2: Disclaimer
DISCLAIMER This presentation is for general information purposes only and should be read in conjunction with the Half Year Financial Report for the six months ended 31 December 2020 and the Appendix 4D lodged with the Australian Securities Exchange by Centrepoint Alliance Limited (ASX:CAF) on 26 Feb
Slide 3: Our purpose is to enable the Australian community's trust in financial advice
Our purpose is to enable the Australian community’s trust in financial advice, because good advice promotes wellbeing 3c Special $70.6m 15% $2.1m $1.8m $14.7m 107% Gross revenue on 1H FY20 on 1H FY20 EBITDA (excl. legacy claims) Cash (at 31 December 2020) on 1H FY20 1c Ordinary Dividend (fully frank
Slide 4: Centrepoint Alliance is a national advice and business services firm with a scalable core offer
CENTREPOINT ALLIANCE IS A NATIONAL ADVICE AND BUSINESS SERVICES FIRM WITH A SCALABLE CORE OFFER 361 (QLD) Self Licensed 179 67 (WA) Corp - Licensed 137 Self Licensed 49 Salaried 0 Corp - Licensed 17 Mortgage Brokers 45 Salaried 0 Mortgage Brokers 1 367 (NSW) Self Licensed 252 Corp - Licensed 62 99 (
Slide 5: Financial Results
FINANCIAL RESULTS CENTREP@INT ALLIANCE
Slide 6: Financial Results Summary
FINANCIAL RESULTS SUMMARY 1H FY20 2H FY20 1H FY21 For the period ($m) ($m) ($m) Gross Revenue 61.5 69.5 70.6 • Gross revenue up $9.1m (+15% PCP) due to higher advice fees & Enzumo integration, partially offset by rebate run-off Adviser fees and commissions (47.4) (54.3) (55.1) Gross Profit 14.1 15.2
Slide 7: Revenue and Expense Analysis
REVENUE AND EXPENSE ANALYSIS Revenue movement ($m) Key revenue movements (PCP): $2.3 $2.0 • Adviser Fees up $2.3m with fee final step up in July 2020 $1.3 $0.1 $15.5 • Rebates down $2.0m due to grandfathered runoffs, with platform rebates ceased from 1 January 2021 $0.3 $14.1 • Investment Solutions
Slide 8: Balance Sheet
BALANCE SHEET FY20 1H FY21 • Cash of $14.7m up $2.5m on June 2020 due to NEOS Life For the period ended ($m) ($m) repayment of $2.4m* Cash & Term Deposits 12.2 14.7 • Cash from operations up $1.8m offset by claims settlements of Trade and Other Receivables 7.8 7.1 $0.9m Loans Receivable 3.6 1.2 • Re
Slide 9: Capital Management (over calendar year 2020)
CAPITAL MANAGEMENT (OVER CALENDAR YEAR 2020) • Audited cash on hand 31 December 2020 - $5.3 $1.8 $14.7m $1.2 • Deferred COVID tax payments to be settled $0.4 $14.7 August 2021 $4.2 • Fully franked 3 cents special and 1 cent interim ordinary dividends declared 2 February 2021 - $5.8 million distribut
Slide 10: Business Results
BUSINESS RESULTS CENTREP@INT ALLIANCE
Slide 11: Three-year transformation has delivered a scalable business model with revenue certainty
THE THREE-YEAR TRANSFORMATION OF CENTREPOINT ALLIANCE HAS DELIVERED A SCALABLE BUSINESS MODEL WITH REVENUE CERTAINTY Gross Revenue ($m) Highlights 70.6 60.2 61.6 • 17% increase in gross revenue since 1H FY19 • 109% increase in underlying AR revenue since 1H FY19, transitioning to recurring fee for s
Slide 12: Continues to attract quality financial advisers, with 27 new advisers joining in 1H FY21
CENTREPOINT ALLIANCE CONTINUES TO ATTRACT QUALITY FINANCIAL ADVISERS TO ITS OFFER, WITH 27 NEW ADVISERS JOINING IN 1H FY21 Industry exits result in flat net growth …despite consistent adviser growth …with improved revenue certainty 12-month adviser movement Improving adviser quality 55 $366k 27 new
Slide 13: Well-positioned in a rapidly evolving industry where consolidation is imperative
CENTREPOINT ALLIANCE IS WELL-POSITIONED IN A RAPIDLY EVOLVING INDUSTRY WHERE CONSOLIDATION IS IMPERATIVE FOR SURVIVAL Licensees are facing significant The industry has become increasingly Centrepoint Alliance in prime position structural pressures fragmented to benefit from industry change Licensees
Slide 14: Wholesale licensee opportunity offers a revenue pool of $30-60 million
WHOLESALE LICENSEE OPPORTUNITY OFFERS A REVENUE POOL POTENTIAL OF $30-60 MILLION IN LICENSEE FEES CAF offer and economics – to pass on to smaller Market opportunity – revenue pool of $30-60 million licensees Economies of scale Opportunity in small licensee segment (11-250 ARs) Small licensees (11-25
Slide 15: Strong execution across strategic initiatives in the final year of Strategic Refresh
STRONG EXECUTION ACROSS STRATEGIC INITIATIVES IN THE FINAL YEAR OF STRATEGIC REFRESH GROW RECREATE Complete Enzumo integration FOCUS Reconfigure the (AAP) self-licensed Create a tailored and distinct market offering and take to market wholesale offering for small and Continue to attract and
Slide 16: Business model delivers servicing at scale, high retention and subscription-like revenue
BUSINESS MODEL DELIVERS SERVICING AT SCALE, LEADING TO HIGH RETENTION AND SUBSCRIPTION LIKE REVENUE FROM SATISFIED ADVISERS ~8,000 enquiries were resolved in Oct - Dec 20 Adviser retention flywheel Number of enquiries by team (Oct-Dec 2020) 3,500 Total Enquiries 3,000 2,500 2,000 1,500 SPECIALISED A
Slide 17: Leading advice technology offering with three years of investment
LEADING ADVICE TECHNOLOGY OFFERING WITH THREE YEARS OF INVESTMENT IN CAPABILITIES, DATA, TEAM AND PARTNERSHIPS Centrepoint AI All service teams Outlook launch Intelliflo migrated to Salesforce, Advice Technology investments Centrepoint Alliance Advice Centrepoint Alliance (live practice partnership
Slide 18: Advice technology extension through partnership with Intelliflo
ADVICE TECHNOLOGY EXTENSION THROUGH PARTNERSHIP WITH INTELLIFLO, PROVIDING MORE CHOICE TO FINANCIAL ADVISERS Centrepoint Alliance Group Centrepoint Alliance advisers piloting first market release of IO, in addition to Enzumo appointed as the Australian implementation partner for Intelliflo Intellige
Slide 19: Market leading offer across multiple market segments, with strong growth ambitions
CENTREPOINT ALLIANCE HAS A MARKET LEADING OFFER ACROSS MULTIPLE MARKET SEGMENTS, WITH STRONG GROWTH AMBITIONS Market Licensee Self-licensed Wholesale Licensee Revenue extensions segments Core business Extension New offer New growth Licensee and tailored wholesale Large licensee for individual Servic
Slide 20: Clear focus to enhance value in second half of FY21
CLEAR FOCUS TO ENHANCE VALUE IN SECOND HALF OF FY21 FOCUS RECREATE GROW • Capitalise on market leadership position in providing quality advice and business services to financial advisers and mortgage brokers • Drive aggressive organic growth in the licensed and self-licensed market • Take advantage
Slide 21: Contact Details
CONTACT DETAILS Angus Benbow Tim Dohrmann Chief Executive Officer Investor Enquiries Centrepoint Alliance NWR Communications E: angus.benbow@cpal.com.au E: tim@nwrcommunications.com.au T: +61 2 8987 3016 M: +61 468 420 846 Brendon Glass Suzanne Dwyer Chief Financial Officer Media Enquiries Centrepoi
Slide 22: Appendices
CENTREPwINT ALLIANCE
Slide 23: Corporate Snapshot
CORPORATE SNAPSHOT Experienced and invested leadership team Capital structure 12 month CAF share price and volume Shares held Board & Management Role ASX Stock Code CAF As at 15/1/21 1H FY21 gross revenue $70.6m Mr Alan Fisher Non-Executive Chairman - Cash balance as at 31 December 2020 $14.7m Mr An
Slide 24: Centrepoint Alliance Services – Scalable Service Platform
CENTREPOINT ALLIANCE SERVICES – SCALABLE SERVICE PLATFORM Instrumental in the payment of Sources: Centrepoint Alliance internal service metrics (1H FY21) 24
Slide 25: Firm Segment Analysis
FIRM SEGMENT ANALYSIS Firms AR's New Firms Ceased Firms New AR's Ceased AR's Firms AR's Key Performance Indicator FY20 FY20 1H FY21 1H FY21 1H FY21 1H FY21 1H FY21 Close 1H FY21 Close Corporate Licence 228 317 15 (15) 27 (36) 228 308 Self Licensed 159 864 8 (18) 113 (170) 149 807 Corporate Licence –
Slide 26: Grandfathered Rebates
GRANDFATHERED REBATES $m 1H FY20 2H FY20 1H FY21 Key points Total Rebate 4.0 4.2 2.0 • Strategic Refresh began in August 2018 to move from a Insurance Rebate 1.1 1.2 0.6 legacy funded revenue model to a new sustainable revenue model, pre-empting legislative changes passed in October Platform Rebate
Slide 27: Definitions
DEFINITIONS Term Definition AFCA Australian Financial Complaints Authority AFSL Australian Financial Services Licence APRA Australian Prudential Regulation Authority AR Authorised Representative of AFSL Licensee to provide financial advice ASIC Australian Securities and Investments Commission Corpor
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