WHK Group has posted a 1.9 per cent decrease in overall group operating revenue for the first half of 2013 as its business transformation program continues, the firm has said in a statement to the Australian Securities Exchange (ASX).
Group operating revenue fell to $210.9 million, financial services revenue was flat and business services revenue dipped 2.5 per cent over the six-month period.
Normalised earnings before interest, tax and amortisation (EDITA) fell to $15.8 million from $23 million year-on-year, impacted by the lower business revenue, particularly in capital cities.
“WHK is into the first full year of its business transformation program. With a group shared services environment, a new principal remuneration model and realigned leadership group, the business is being settled for sustainable growth in the short and medium term,” the firm said in the ASX statement.
In light of a continued tough market in late-2012, the group also commenced a ‘business efficiency’ program, which resulted in the reduction of 123 roles in the company in October and November 2012.
WHK directors expect to see the positive impacts of the business transformation and efficiency programs emerge in the second half of the year, with full benefits enjoyed in future periods.
The results follow news that a potential merger between SFG Australia (SFGA) and WHK Group, first mooted in October last year, has progressed with a written proposal to be considered.
SFGA has provided the WHK board with a non-bonding indicative proposal, with the WHK board indicating their intention to evaluate the proposal, according to a statement to the Australian Securities Exchange.
“SFGA believes that a friendly scrip-based merger with WHK, with shared board and management control, will deliver substantial synergies and unlock significant value for both sets of shareholders,” SFGA said in the statement.
SFGA’s proposed merger ratio would see WHK shareholders own 42 per cent of the merged group – equating to 0.503 WHK shares for SFG shares. This represents a premium to the 39 or 40 per cent that would have resulted if either the current spot price or three-month volume-weighted average price were used.
SFGA added that conversations were confidential, incomplete, conditional and subject to due diligence, with no guarantee of the transaction going ahead.
Similarly, news hit last week that SFGA has entered into a binding agreement to acquire wealth management and accountancy group Lachlan Partners, adding 55 advisers and accountants to its existing 109 representatives.
The move also adds approximately $606 million in funds under advice (FUA) to SFGA’s $10.8 billion in FUA, and will be effective from 1 March.
