IOOF Holdings’ (ASX: IFL) net profit jumped 38 per cent to $14.1 million for the half-year ended 31 December 2006, driven by strong retail growth.
Cash earnings grew by 33 per cent to $27.1million and funds under management (FUM) and administration increased 8 per cent to $30.8 billion.
IOOF increased its retail assets under management by 7 per cent to $14.1 billion.
The group declared an interim dividend of 15 cents per share up 25 per cent from the previous first half year of 12 cents.
“This is an excellent result given the initiatives we have delivered in the first half of the year,” IOOF chief executive Ron Dewhurst said.
“The reception of Pursuit among advisers and investors has been very pleasing with flows exceeding our expectations,” Dewhurst said.
IOOF’s wholesale arm Perennial Investment Partners has a slower half year, increasing FUM per from $15.4 billion (June 2006) to $16.7 billion in the wake of the loss of several mandates.
The market responded negatively yesterday to the result wih IOOF shares falling 7.56 per cent to $10.40.
“It’s the reality of the institutional business – it comes in lumps and it goes out in lumps,” Dewhurst said. “When you get to a certain size, you’ll lose a few mandates.”
The otherwise positive result follows a year of changes to IOOF’s product line up. The company acquired the remaining shares in Perennial Investment Partners Limited and established financial advice business Consultum by merging its two advice lines Winchcombe Carson and Financial Partnership.
It also launched the Pursuit platform, formerly known as the IOOF Portfolio Services model, with a rewired cost structure to appeal to self-managed super funds and high net worth investors.
Dewhurst said the group was expected to continue its earnings forecast of 15 per cent earnings growth.
IOOF is still searching for a successor to its outgoing chief executive, who will not be renewing his contract from April.
