In a listing on Monday, Sequoia disclosed that The Australian Wealth Advisors Group acquired an 18.2 per cent share in the firm on 30 January.
This acquisition of 22,372,876 ordinary shares – at 30 to 40 cents per share – positions the group as a significant shareholder in the company.
The Australian Wealth Advisors Group made the acquisition through different entities, according to the listing, with the majority (19,772,876 shares) held via JP Morgan Nominees Australia, likely as a custodian. An additional 2,000,000 shares are held through the Armytage Micro Cap Activist Fund (MCAF), while the remaining 600,000 shares are held in the MACDY No 5 Super Fund, linked to individuals Peter Geoffrey Hollick and Helen Therese Pattison.
Speaking to InvestorDaily’s sister brand Money Management, AWAG chair Lee Iafrate said the group saw an opportunity to buy shares at a deep discount to fair value.
“It was trading at an unrealistic discount after the corporate activity, and we see it as a re-rating opportunity,” Iafrate said.
“There is good potential for further rationalisation and corporate activity in financial advice, and we believe Sequoia is integral to this and we want to be an active participant in that.”
In August, Sequoia reported a $24 million statutory net profit after tax, alongside a boost in continued business revenue of 26 per cent.
The firm divested 80 per cent of Morrison Securities in September 2023 for $40.5 million, having first acquired it in September 2017.
In its full-year results, the firm said the divestment contributed $27.1 million to its statutory net profit after tax.
During the year, Sequoia also acquired the customer book of Castle Corporate, Castle Legal and Australian Business Structures, and acquired Clique Paraplanning.
Garry Crole, chief executive, acknowledged FY2023–24 had been “disruptive” after a group of shareholders attempted to change the constituents on the board. This impacted operating momentum, caused unrest among employees and advisers and resulted in additional costs to maintain businesses and staff throughout the period.
The bid was ultimately unsuccessful at an extraordinary general meeting in June, but several changes have since been made to the business in response.
This includes the streamlining of its existing divisional structure from four to two and an agreement that Crole will step back from the leadership role by FY26–27.
He said: “As we reflect on the past year, we have faced considerable challenges. Disruption in the second half impacted operating momentum, caused unrest amongst employees and advisers, and resulted in additional costs to maintain business and staff. Despite these hurdles, we are proud to report strong growth in revenue and operating profit.
“We are streamlining our business to ensure greater efficiency and agility, positioning Sequoia for continued profitable growth.”
