Consultation fees drive the NPAT of the Centrepoint Alliance into positive territory

The Centrepoint Alliance returned to profitability in FY21 after posting a loss the previous year and posting net income after tax (NPAT) of $ 1.8 million.

The company reported its FY21 results to the Australian Securities Exchange (ASX), saying its NPAT compares to losses of $ 2 million a year earlier and was driven by revenue growth in advisory fees and careful expense management.

This “careful expense management” included savings on employment, travel, and entertainment; the suspension of any further legacy claims by the Australian Financial Complaints Authority (AFCA); and expenses down 15.7% to $ 26.5 million.

The company has decided to pay a fully stamped dividend of one cent per share.

It is “well positioned” to benefit from industry dislocations in margins and educational standards, and the transition to a service model is largely complete. The new offer for authorized representatives was completed at the end of FY20, while the offer for self-licensed companies will be completed in the course of FY21.

During the year, by the end of Fiscal Year 21, the company had added 16 new self-licensed companies with 149 companies, and an additional 23 companies had switched to the service model.

CEO John Shuttleworth, who took over as CEO earlier this month, said, “Focusing on our core business has positioned the company with a strong growth platform that remains an attractive destination for consultants.

“We enter FY22 with positive growth prospects and look forward to delivering high quality business services and support to a wider range of financial advisors over the coming year.”

The company also announced the acquisition of ClearView Advice, creating a combined unit of 1,303 advisors (consisting of 490 licensed and 813 self-licensed). ClearView’s CEO, Simon Swanson, was due to join Centrepoint’s board of directors upon completion.

ClearView Advice has a “strong market position in providing strategic financial advice to middle- to upper-income clients” and is an opportunity to scale ClearView’s existing infrastructure to support a larger number of Australian financial services licenses (AFSLs) and financial advisors.

The transaction requires regulatory and shareholder approval, but is expected to close on October 31, 2021.

Shuttleworth said, “The acquisition creates a powerful combination of complementary intellectual property, skills, experience and balance sheet access, and enables the platform to participate in continued organic and strategic transaction growth as the industry upheaval persists.”

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