The business units of dealer group Professional Investment Services (PIS) are under review following a 30 per cent reduction in net revenue in the past 12 months, the firm’s chairman has said.
“The board has all aspects of the business under review at the moment and will continue to do so as we climb back out of the difficult times,” PIS chair Stephen Murphy wrote in a letter to shareholders last week.
Results for the financial year, after provisions and impairments, resulted in an after tax loss of $21 million, Murphy said.
“We can identify the direct affect of the global financial crisis as a reduction in net revenue of 30 per cent and a reduction in both client asset values and new business written,” he said.
PIS did achieve an operating profit before provisions, impairments and taxation of more than $1 million, Murphy said.
While the settling of PIS’s Westpoint action with ASIC was a high point, a small number of “rogue” advisers created a set back for the group, he said.
Despite ASIC discontinuing its 2006 review, the regulator commenced a new review which includes a review of many Great Southern and Timbercorp files, Murphy said.
“The board has taken advice from management and believes that as a result of the Building a Better Business project we are significantly better positioned now than in 2006 in relation to compliance and risk management,” he said.
“Whilst we cannot guarantee no further ASIC action, we can say we will be vigorously defending our current position, the improvements we have made and of course the integrity, skill and expertise of our advisers.”
PIS has recognised and provided for claims, both current and non-current, and after consideration of liabilities, company directors believe the company will maintain as a going concern, Murphy said.
Amid poor revenue performance, reports surfaced late last week that National Australia Bank (NAB) was interested in purchasing the dealer group.
“MLC has an option to acquire Aviva’s stake (23 per cent) in PIS at a future date, however, the terms of this option remain confidential. We are working with PIS to explore opportunities for the future,” a NAB spokesperson said.
PIS were unavailable to comment on the buyout rumour.
