Centrepoint Alliance Limited · ASX:CAF
Centrepoint Alliance — FY2015 Earnings Presentation
28 slides from Centrepoint Alliance's earnings presentation, Aug 21, 2015
Slide 1: Full Year Results
For personal use only Full Year Results Centrepoint Alliance Limited 30 June 2015 ASX:CAF
Slide 2: FY15 Highlights
FY15 Highlights • For personal use only Statutory net profit after tax of $5.9m up 78% on pcp. Underlying pre-tax profit of $7.0m was down 15% • Centrepoint further consolidated its position as a leading independent wealth and premium funding business with good growth in new clients off the back of
Slide 3: Centrepoint’s vision
Centrepoint’s vision For personal use only To be recognised as Australia’s most trusted and respected financial services organisation By: • Being the leading choice for independent advisers • Partnering with world class service providers to deliver quality solutions for advisers and their clients •
Slide 4: 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 $2 trillion • $4.7bn premium funding market expected to grow at an average of 7% pa over the next 20 years • Distributed via General Insurance br
Slide 5: Our Wealth services & solutions
Our Wealth services & solutions For personal use only Practice Consulting Platform & Investment Solutions • Business health • Managed Account Portfolios • Strategic and operational planning Platforms & • Ventura Funds Management Practice • Business process improvement Investment • Investment Diversi
Slide 6: Financial summary
Financial summary Change Financial Highlights For personal use only FY13 FY14 FY15 FY15 v FY14 • $4m revenue impact of Total Revenue $52.6m $51.7m $48.9m ▼ (5%) soft commercial Total Expenses (ex claims) $49.2m $45.5m $43.7m ▼ (4%) general insurance Cost to Income Ratio 93% 88% 89% ▲ 1% premium mark
Slide 7: Business line profit summary
Business line profit summary For personal use only Change Summary Segment FY13 FY14 FY15 FY15 v FY14 • Wealth performing well with Wealth $6.7m $6.5m $7.1m ▲ 10% new business model attracting new practices and Funding $3.7m $5.3m $2.5m ▼ (52%) increased adoption of wealth Corporate ($4.6m) ($3.5m) (
Slide 8: Underlying Profit Reconciliation
Underlying Profit Reconciliation Change Comments For personal use only FY13 FY14 FY15 FY15 v FY14 Underlying Profit $5.8m $8.3m $7.0m (15%) • Legacy claims expense ($2.4m) Legacy claims relates to an increase in the provision ($10.0m) ($1.9m) ($2.4m) 25% for claims associated with advice Amortisatio
Slide 9: Group balance sheet
Group balance sheet Change FY13 FY14 FY15 Highlights FY15 v FY14 For personal use only Cash and Term Deposits $9.4m $21.4m $12.5m (41%) • Strong cash position and stable Balance Sheet Interest Bearing Receivables $107.6m $130.7m $122.5m (6%) • Decrease in Receivables Other Current Assets $16.7m $17.
Slide 10: Wealth highlights
Wealth highlights Financial • Underlying profit up 10% to $7.1m For personal use only • Post FOFA revenues grew strongly with Funds Under Administration up 16% and Funds Under Management up 10% offsetting decline in grandfathered revenues • Strategic initiatives being funded by operational efficienc
Slide 11: Wealth Results
Wealth Results For personal use only Change FY13 FY14 FY15 Summary FY15 v FY14 Revenue $35.9m $32.5m $31.6m ▼ (3%) • Revenues stabilised. Growth in post FOFA wealth revenues Expenses ($29.2m) ($26.0m) ($24.4m) ▼ (6%) offsetting loss of grandfathered Underlying PBT $6.7m $6.5m $7.1m ▲ 10% income Key
Slide 12: Alliance Wealth & Protection
Alliance Wealth & Protection For personal use only • Wholly owned subsidiary company of Centrepoint Alliance • High quality, client focused salaried financial advice business with a team of 12 • Not aligned or affiliated with any major institution • Ability to provide mums & dads, HNWs and family of
Slide 13: Funding highlights
Funding highlights Financial • Underlying profit down 52% to $2.5m For personal use only • Premiums funded down 14% to $384m driven by commercial GI premiums down circa 10-20% per industry commentators • Difficult environment for brokers in soft GI market causing pressure on commission. Higher fundi
Slide 14: Centrepoint Funding results
Centrepoint Funding results Change FY13 FY14 FY15 Summary For personal use only FY15 v FY14 Revenue $16.0m $18.6m $17.0m ▼ (9%) • The 10-20% fall in GI premiums in “soft” market resulted in premiums funded Expenses ($12.3m) ($13.3m) ($14.4m) ▲ 9% being down $60-$70m and revenues Underlying PBT $3.7m
Slide 15: Funding: broker and loan numbers
Funding Strong focus remains on the key long term value drivers For personal use only Broker Numbers • Broker numbers have increased 42% since 2013 off the back of strong distribution team 382 362 • Our reputation for consistent, reliable and responsive service is now 269 228 216 being combined with
Slide 16: Funding: premiums funded and margin
Funding • Premiums funded decreased by $61m or 14% in FY15 due to soft For personal use only Premiums Funded WA Non-WA GI market and weakness in WA economy $300m • Non-WA premiums funded increased 21% in FY15 following a 38% increase in FY14. This more than offset the loss of some WA accounts as
Slide 17: Deferred Tax Asset Recognition
Deferred Tax Asset Recognition • In FY15 the Group recognised an asset of $4.3m which is credited to statutory profit after tax from the For personal use only recognition of off balance sheet deferred tax assets • Given the strengthening financial results and the expectation of future profits, the G
Slide 18: Legacy claims
Legacy claims Legacy claims are claims related to advice provided pre July 2010 and prior to the acquisition by For personal use only Centrepoint in December 2010 An independent actuarial assessment was undertaken of past experience and projected future likely experience resulting in $2.1m additiona
Slide 19: Dividends
Dividends cents per share Dividend per share For personal use only 2.5 2.2 • The Board has declared a final 2.0 dividend of 1.2 cents per share 1.5 fully franked 1.2 1.0 1.0 • Record date is 25th September 2015 with payment on 16th 0.5 October 2015 0.0 1H14 2H14 1H15 2H15 • A Dividend Reinvestment P
Slide 20: Strategic initiatives - update
Strategic initiatives - update Organic Growth • Strong organic growth in both new wealth practices and GI brokers For personal use only • Increasing take up of in-house platforms and funds by advisers • Sales and marketing capability improving underpinning future growth • Improve margins by lowering
Slide 21: Summary
Rummary S • Wealth will focus on recruiting quality practices and increasing adoption of Centrepoint For personal use only solutions • Funding will continue to grow premiums funded, broker relationships and reduce costs • Expansion of salaried advice model to continue • M&A capability established wi
Slide 22: Appendices
For personal use only Appendices Page 22 FY15 Investor Presentation, 21 August 2015
Slide 23: Our Story
Our Story 1991 Alliance Finance founded by Martin Kane in WA, offering insurance premium funding and For personal use only equipment finance June 2002 Listed on ASX (CAF) Sept 2005 Merger with Centrepoint Finance, co- founded by chairman Rick Nelson. Renamed Centrepoint Alliance Dec 2010 Centrepoint
Slide 24: Original Wealth plan complete
Original Wealth plan complete Grow For personal use only 2015 onwards Position for Growth • Strengthen brand and grow 2014-15 awareness • Support practices build high Stabilise • Build experienced quality sustainable businesses transformational management • Build marketing capabilities 2013-14 team
Slide 25: The Centrepoint Family
The Centrepoint Family Brand re-launch including new brand architecture scheduled for October 2015 For personal use only Centrepoint Centrepoint Wealth Funding Financial Advice Platforms & Funds Premium Funding Mortgage Broking Administration Management & Asset Finance Associated Advisory Investment
Slide 26: Definitions
Definitions Term Definition CAGR Compounded Annual Growth Rate For personal use only The collective term for Funds under Distribution Agreements, Advice, Administration, Funds Management and Managed Portfolios Funds under Administration Funds upon which the Group derives fees as the responsible enti
Slide 27: 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 21 August 2015. This presentation does not provide recommenda
Slide 28: 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 6, 2 Elizabeth Plaza Level 6, 2 Elizabeth Plaza North Sydney NSW 2060 North