Growth in platform funds under administration (FUA) helped drive financial services provider DKN Financial Group Limited (DKN) to a 25 per cent increase in net profit after tax (NPAT) over the previous corresponding period.
The group reported an NPAT of $2.15 million for the half year to December 31st and reported a 15 per cent growth in FUA for the half year, which equated to a 27 per cent growth from December 2005.
With total FUA reaching $2.88 billion, continuing to grow FUA and adding independent financial planning practices remained the focus of the business, said DKN chief executive Phil Butterworth.
"DKN continues to seek further minority investments in quality financial planning practices. This, together with our platform division forms the core growth areas of profitability for shareholders," said Butterworth.
"DKN is on-track to exceed previously advised targets for FY2007 and anticipate a revised net profit of at least $4.5 million, with the assumption that current trading conditions continue.
"We believe there will be a significant increase in the number of financial planning principals looking to retire in the next three to five years and DKN has established itself as one of the few alternatives for practices to remain outside an institutional environment."
DKN derives its core profits through recurring margins on FUA in platforms and product, and profit contributions through DKN's equity positions in a portfolio of financial planning practices.
The cost of closing its planning division last year was responsible for a 43 per cent drop, to $1.7 million, in DKN Financial's net profit after tax (NPAT) attributable to members, for the year to June 30, 2006. On August 23, the group acquired a minority stake in Tulare Financial Planners for $960,000. DKN also acquired a minority stake in self-managed superannuation funds investment advice and administration services group Thornton for $2.55 million, on November 2.
DKN has a core client base of 150 practices that choose to remain non-aligned to the major financial institutions.
The groups share price remained unchanged at $1.45 yesterday.
