The update to the Australian Securities Exchange (ASX) came as Centrepoint, the parent company of financial planning dealer group Professional Investment Services, prepares to acquire the remaining shares in licensee services group Associated Advisory Practices.
In a director's report for the six months to 31 December 2012, released on 1 July this year, the group outlined a one-off increase in the provision for legacy advice claims of around $4 million. Net claims expense in excess of assessed recurring cost for the 2012/2013 financial year was estimated at $4.9 million.
The new data from an independent expert’s report related to the scheme of acquisition for the AAP deal also outlined a $500,000 cost for the financial year for professional fees related to the enforceable undertaking and ongoing monitoring imposed by the Australian Securities and Investments Commission.
“The AAP scheme documents reflect a consolidated net loss after tax for FY13 for the Centrepoint Alliance Group of approximately $4.2 million, comprising a loss before tax of $2.2 million and a tax expense of $2 million,” the group stated.
This reflects a normalised net profit after tax of $4.5 million, according to the statement.
The group also estimated Future of Financial Advice implementation costs for the year at $586,000, $426,000 in payouts for terminated executive staff and a $351,000 hit to asset valuations. However, the group also estimated close to $2 million in savings due to restructuring.
