Targeted business takeovers and organic growth remain part of Investorfirst’s business strategy despite federal government reforms financially impacting the financial services group’s core operations.
In a statement to the Australian Securities Exchange, the company reported a net loss after tax of $4.45 million for the year ending 30 June 2011.
The loss has been attributed to the company’s expansion into new areas of business as well as the Future of Financial Advice (FOFA) reforms.
As a result of the loss, Investorfirst is expected to become “much less reliant” on variable stock market volumes and associated brokerage revenues, the statement said.
Instead, the company intends to build a suite of asset based annuity revenue streams.
“Our aim, where possible, is to grow the business both organically and through targeted complementary business takeovers,” the company said.
“Whilst, we continue to actively pursue further merger and acquisition activity, we also plan to embark on a period of rationalisation of the business following the successful acquisition of HUB24 in December of 2010.”
In line with its rationalisation plans, the company will undertake a review which will include an in-depth look at the ongoing viability of the Alert Trader Group as a standalone entity.
In terms of its HUB24 acquisition, the group said ongoing development spend of software and legal structuring is likely to impact the business’s net financial performance next year.
Another impact to the business has been the late repositioning to that of an investor directed portfolio service provider.
“This was somewhat exacerbated by the uncertainly surrounding the [FOFA] legislation,” the company said.
Despite the reforms resulting in higher costs for the group, without significant corresponding revenues, Investorfirst remains confident HUB24 is close to announcing “several significant transactions” which will result in stronger, lump sum fund inflows.
As well as its net loss, Investorfirst’s revenues fell 6.8 per cent over the previous corresponding period (pcp) to $8.14 million.
The group reported total operating expenses of $12.59 million equating to a 28.5 per cent increase on pcp.
In terms of future outlook, the company is in an “ideal position” to capitalise on strategic investments with a strong balance sheet containing net cash and unpaid buys position of $19.2 million as at 30 June 2011.
