a repost of an article from Feb this year
https://www.copyright link/companies/financial-services/insignia-financial-says-mlc-integration-18-months-ahead-of-schedule-20220224-p59z77Insignia Financial chief executive Renato Mota says the company’s simplified model will allow it to chase a bigger share of a growing need for financial advice, after the rebranded IOOF handed down a 79 per cent increase in underlying profit to $117.9 million.
In its presentation to analysts on Thursday, Insignia said expectations the superannuation market would grow to $9 trillion by 2041 from $3.4 trillion, a 21 per cent increase in household savings to September last year and a 38 per cent decline in the number of financial advisers over the past three years all combined to underscore the need for investment advice.
“We’re really well positioned to leverage that ongoing growth and that’s certainly part of our strategic rationale, and that’s what’s driving our decisions and our initiatives,” he said.Mr Mota said Insignia expected to deliver targeted cost savings from the integration with MLC likely to be completed by the end of calendar 2022, 18 months ahead of schedule as the company reported a 79 per cent increase in underlying profit to $117.9 million.“I think at the time of the acquisition many considered it to be a bold acquisition, but equally today’s results demonstrate that the strategy is delivering results,” Mr Mota said.
Its net profit after tax was $36.2 million for the half-year ended December 31, compared with $53.8 million a year earlier, “reflecting an increase in integration and funding costs of $35.4 million”.“We continue to deliver on executing our integration and simplification priorities,” Mr Mota said in a statement to the ASX.Cost savingsThe company will pay an 11.8¢ a share dividend on April 1, introducing a dividend reinvestment plan with a 1.5 per cent discount. This compares with a final 11.8¢ dividend, with the payout ratio sliding to 65 per cent given capital considerations related to the acquisition.Insignia said funds under management and administration increased by $7.1 billion to $325.8 billion in the half, with growth driven by strong market returns and improvement in net flows during the second quarter.Insignia said it delivered $66 million in cost savings from the MLC merger during the six months to December 31, bringing the cumulative total to $122 million. Its 2022 target has now increased to $100 million to $120 million, from a previous $80 million to $100 million.The company faced a backlash from shareholders angry at the $1.4 billion price tag for the MLC acquisition, which helped it leapfrog AMP to become the country’s biggest financial advice company.Commenting on the outlook, Mr Mota said: “Our integration initiatives and early simplification efforts have proven successful to date. Our business is acutely focused on operational simplification, enhancing products and services, and delivering long-term value to clients, members and shareholders.”
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