DKN Group has moved to reassure shareholders a forecast goodwill write-down of $21 million will not impact on its proposed sale to IOOF Holdings.
In a statement to the market yesterday, DKN said it had consulted with IOOF over its write-down, with the fellow listed financial services firm confirming "no potential impact on its proposal arising from this".
"In order to reflect current market valuations and business conditions and having regard to the value of the 80 cents a share scheme consideration, the directors intend to write-down the carrying value of goodwill in its accounts in the results to 30 June 2011," DKN said.
It said the scheme process was proceeding in line with the timetable documented in the scheme implementation agreement.
As well as the $21 million goodwill write-down, DKN anticipated a loss of $14 million for the full year to June 2011.
The loss includes underlying net profit after tax of $7 million, a figure roughly unchanged from the company's 2010 results, it said.
DKN experienced a slight increase in funds under advice at 30 June 2011 of $80.2 billion, up 8 per cent on the previous year.
Despite positive inflows over the year of $300 million, inflows were down 40 per cent from the 2010 full year.
"These figures reflect lower investor confidence, uncertainty arising from impending regulatory changes and the loss of one medium-sized wealth management practice from the network," DKN said.
During the year, DKN made investments in two financial services practices, while its licensee, Lonsdale Group, added seven new associated firms to its network.
In June, DKN confirmed to the market it was in acquisition discussions with IOOF.
