The group reported an underlying net profit after tax (UNPAT) of $65.9 million for the six months to 31 December, up 17 per cent on the prior corresponding period (pcp). IOOF’s statutory NPAT came to $54.4 million, up 96 per cent on the pcp.
The group closed the first half of the 2021 financial year with total funds under management, administration and advice (FUMA) of $202.4 billion, up by 39 per cent, despite negative moments of $10 billion, including $8.1 billion being shed from the terminated BT arrangement.
Outflows also included $1.2 billion being withdrawn through the early super release scheme.
Average FUMA for the period was $204.3 billion, rising by 43 per cent.
IOOF reported its proprietary technology had delivered significant inflows into its flagship advised platforms, with growth reaching $785 million inflows.
The board declared a special 8 cent dividend as well a fully franked interim dividends of 11.5 cents per share, bringing the payment within its target 60 to 90 per cent dividend payout range.
Chief executive Renato Mota commented it was a “solid result”. The group is continuing to growth through its strategy of acquiring the ANZ Pensions & Investments business and MLC, overhauling its advice model and reducing its platform offerings down to one proprietary platform.
“We have a very clear strategy for growth. It centres on scale, economic diversity and developing end-to-end client relationships,” Mr Mota said.
“This strategy responds to both the changing market dynamics and client end-to-end life stage opportunities.”
IOOF commenced rolling out its Advice 2.0 restructure in September, with the group now targeting $10 million for its first tranche of annualised savings for the full year. The self-employed advice model is anticipated to breakeven in FY23.
“In advice, our focus is on sustainability, accessibility and affordability, with technology as the enabler of this strategy,” Mr Mota said.
The group paid out $9.3 million in advice remediation during the half, with $5.3 million in program costs incurred. The program is estimated to wrap up by the end of August.
The MLC acquisition on the other hand is on track to be completed by 30 June.
Mr Mota is optimistic that the group will be strongly positioned for the shifting wealth market, as it strives to complete a number of targets in the coming second half.
“Longer-term, we continue to see significant changes in the market as the ageing population increasingly looks for wealth management advice, and retirement and post retirement solutions to address their complex needs,” the chief said.
“This combined with increasing per capita wealth and ongoing disruption in the industry to meet emerging societal and technological needs, offers good opportunities for IOOF.”
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
