Markets need to bounce back fairly significantly if diversified financial services group IOOF is to match its profit results of last year.
In an announcement to the Australian Securities Exchange (ASX), the Melbourne-based group forecast it would now only match the 2006/7 underlying net profit after tax (UNPAT) of $29.2 million if markets improved.
The 2006/7 result was a 26 per cent improvement on the previous corresponding period.
The group had previously forecast market growth for its IOOF-branded products and Perennial equity funds businesses in 2007/8 of 5 per cent and 8 per cent respectively.
The group stated that net profit after tax (NPAT) would be even lower than the UNPAT result, but did not give an estimate. IOOF's 2006/7 NPAT was $22.3 million.
In a carefully worded statement to the ASX, IOOF said it expected second half revenue would be impacted by the lower funds under management and administration (FUMA).
The fall in FUMA was as a result of recent declines in equity markets and a resultant slowing of fund flows into equity-based products.
FUMA for the December quarter had fallen $2 billion, to $34.6 billion. IOOF started the 2007/8 year with FUMA of $34.8 billion.
