Centrepoint Alliance experienced a 133 per cent spike in profit before tax in the latter half of 2014, in spite of slightly decreasing advice and product revenue.
The ASX-listed company yesterday announced its half year results, with a statutory net profit after tax for the group of $2.9 million, up 126 per cent on the corresponding period.
Underlying profit before tax for its wealth business – which includes dealer groups Professional Investment Services and Alliance Wealth – was up 29 per cent to $4 million.
Speaking to InvestorDaily, Centrepoint Alliance managing director John De Zwart said the increased profits reflect the company reaping the benefits of previous investment in technology and a growing take-up of services from its financial adviser and insurance broker networks.
“The profit growth is really attributable to business simplicity, we have been very focused on cost reduction and removing all of the complexity that was in this business,” Mr De Zwart said.
“We took the low value-adding services and turned them around to value-add, such as our IT systems.
“We are seeing the level of work coming down in terms of our compliance teams and claims teams, so really we are reaping the rewards of previous investment.”
At the same time, the company reported a slight decrease in revenues for its advice and product businesses, largely attributable to decreasing adviser numbers on the previous half year.
Mr De Zwart said the dealer group businesses had been experiencing some natural attrition, with some practices deemed not to be culturally aligned leaving the group, thereby taking revenues with them.
“We’re still going through and filtering our advisers,” he said. “We are only interested in people that are aligned with where we want to go and providing quality advice.
“If they don’t want to play in that space we don’t want them.”
Magellan chairman and CIO Hamish Douglass has said he’s not afraid of missing out on a “short-term market rally” and that mutant virus...