Professional Investment Holdings (PIH) has recorded a $2.78 million turnaround in operating profit for the six months ending 31 December 2009.
The operating profit of PIH, the parent company of dealer group Professional Investment Services, stood at $1.535 million, up from a loss of $1.225 million in the prior corresponding period.
Net advice revenues increased by 3.8 per cent to $22.9 million, with income from the group’s Associated Advisory Practices networks remaining solid, the firm said in a report.
PIH experienced an 18.5 per cent increase in revenue from funds management activities to $1.14 million.
It recorded a drop in employee benefits and expenses of 16 per cent to $11.6 million.
The firm used $3.2 million of cash to support the activities of the business to the end of December 2009, as opposed to $18.1 million to the end of December 2008.
In a letter to shareholders, PIH chairman Stephen Murphy said the results were a positive for the group, though economic conditions and the group’s past legacies continued to be felt as provision costs increased.
“The increase in provisions is predominantly related to client claims and amounts to some $4.2 million,” Murphy said.
“Whilst the number of advisers that are subject to genuine client claims is very small in relation to the overall adviser population, they do unfortunately continue to have a significant impact on our profitability.”
He said the firm has also made provisions for a potential loss on a loan made by PIH to an adviser now in financial difficulties.
“We are taking steps to recover these monies, but we have taken a conservative stance and provided for non-recovery in this report,” Murphy said.
Despite the increase in provisions, PIH has experienced $800 million in new investment inflows, with total funds under advice standing at around $21 billion.
