Financial services group Prime Financial Group is in a firm position to continue along its acquisition path after its half-year results revealed the company is debt free and cash-flow positive.
Prime yesterday announced it had returned a first-half profit of $3.11 million, a 132 per cent jump in net profit after tax (NPAT) from the previous half-year.
“Both financial planning and accounting continue to really exceed expectations and I think definitely on the financial planning front its an endorsement of our distribution model, our 50/50 equity model,” Prime managing director Simon Madder said.
Around 70 per cent of Prime’s earnings are driven from its financial planning division. The group’s accounting division represented about 25 per cent to 27 per cent of the increase, while the remainder was from funds management, Madder said.
“The accounting part of the business has really has stepped up to the next level. It’s an income stream for us that are not tied to equity markets in any way and we’re finding that the six accounting firms that we own part equity in have generated some great revenue in the first half,” he said.
Prime is also on the lookout for further equity partners, though Madder would not reveal any details of possible discussions.
Last week, Prime announced it had purchased the remaining stake in advisory business Carroll Pike and Piercy (CPP). As a result it has consolidated its financial planning and direct equities operations.
The acquisition of CPP’s remaining 51 per cent gives Prime access to CPP’s 3400 self-managed superannuation fund clients and a potential 42,000 clients. Prime purchased 49 per cent of CPP in 2004.
Prime has more than 200 staff. It has 31 licensed advisers and an existing client base with $3 billion in funds under advice.
