AWM expects further earnings growth in FY07 7/09/2006 By: Alex King Australian Wealth Management Limited (AUW) has posted a net profit after tax of $20.1 million, an increase of 39% over last year. The company, which merged with Select Funds Management in May, advised that it expects to grow its earnings in FY07 in line with market expectations.
Advertisement Looking ahead, managing director Chris Kelaher said the group is confident that the company will grow its FY07 NPAT in line with market expectations, given no material change to conditions in the market place and within the business.
“This expansion will come from strengthening our position as a profitable and growing provider in the wealth management industry,” Mr Kelaher explained.
Commenting on this year, Mr Kelaher said it was a pleasing result, in a time of significant change, and reflects the strengths of the underlying businesses of Australian Wealth Management (“AWM”).
Given this is the first financial report since the merger between AWM and Select Managed Funds (“SEM”), the group advised that the result constitutes 12 months of SEM and one month of AWM’s results.
The group, which was spun off from trans-Tasman insurer Tower early in 2005, reported its net profit after tax, and before significant items, increased 64% to $23.7 million whilst net operating revenue was also up 49% to $65.2 million.
Mr Kelaher said AWM remained comfortable with the two-year integration timeframe, which confirmed the company’s original view that there was a strong fit between the businesses.
“We have begun capturing synergies and making process improvements across the two businesses,” Mr Kelaher advised.
During the year, the company completed a number of bolt-on acquisitions including Merrill Lynch (Super and Pension Fund) Limited, the WHK Umbrella Superannuation Fund and Challenger Funds Management Limited.
AWM said it continues to see similar acquisition opportunities in this area.
The group said favourable markets and acquisitions helped significantly increase the value of funds under management to $42.2 billion.
The company also reported that its results were assisted by focus on controlling costs, with operating expenses as a percentage of revenue reducing from 54% to 50%.
AWM announced a final dividend of 1.5c per share and a special dividend of 4.50c per share, both fully franked, making the total dividend for the year 9c.
At 1430 AEST, Australian Wealth Management was up 18c to $2.36.
AUW Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
