Centrepoint Alliance, which provides advice and business services to financial advice firms, has announced solid growth for the full-year 2021 (FY21) with a net profit after tax of $1.8 million, despite a challenging year for the advice industry and the ongoing uncertainty around the COVID-19 pandemic.
The firm attributed its net profit to continued revenue growth in advice fees, diligent expense management, and an unexpected run-off in legacy funds and administration. Centrepoint Alliance also experienced 6% growth in gross revenue from FY20 to $138 million, driven by the solid performance of the licensee solutions business and an increase in authorised representative fees. By contrast, its expenses declined by 15.7% from FY20 to $26.5 million as the company management focused on cost reduction.
“Centrepoint Alliance is proud to have delivered improvements in revenue and profitability throughout FY21 despite challenging trading conditions,” said Centrepoint Alliance CEO John Shuttleworth. “When I joined Centrepoint Alliance earlier this month, I found a business that benefits from a very favourable position in a rapidly evolving advice industry, with competitive pricing and capabilities in both the licenced and self-licensed segments.”
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The purchase will be financed by issuing $12.0 million in escrowed CAF shares and a cash consideration of $3.2 million. As a result, ClearView will become a substantial (25%) shareholder in Centrepoint Alliance.
“This transaction represents the next phase of Centrepoint Alliance’s growth by providing immediate scale and will increase the business’s long-term value and profitability,” Shuttleworth said.
The company’s continued investment in technology also paid off, with the successful integration of Xplan service provider Enzumo enhancing the scalable service platform for advisers.
“We know that technology has a clear impact on the profitability and efficiency of our members’ businesses. In FY21, key initiatives included upgrading our CRM system to incorporate business intelligence tools and bedding down the acquisition of Enzumo to enhance our technology and data services,” Shuttleworth said.
“We have also invested in delivering service at scale within our own business, which has resulted in high levels of member satisfaction. Today, 93% of enquiries received are resolved within two days, with average turnaround time improving by 20%.”
For FY22, Centrepoint Alliance will focus on growing its licensee solutions to build grander scale and profitability, further investing in technology, and enhancing its portfolio implementation solutions while keeping costs low.