The fall in equity markets and lack of client confidence has left Prime Financial Group (Prime) down 30 per cent in new advice business and recurring income for the 12 months to June 2009.
As indicated to the market in June this year, the firm reported earnings before interest and tax (EBIT) excluding capital items down 42 per cent on financial year 2008.
One-off costs of $320,000 relating to the integration of CPP Financial Planning and investment operations also affected Prime's EBIT for the first quarter of 2009.
However, despite the firm's financial planning division being adversely affected by the market, Prime still recorded a net profit after tax of $10.8 million.
Early cost-cutting measures such as company-wide salary freezes helped Prime keep its overheads 20 per cent lower than the 2008 financial year.
"Prime continues to see strong long-term opportunities for growth in financial planning via the expansion of its client-centric independent operating model free from conflicts of interest," Prime managing director and chief executive Simon Madder said.
"Prime's self-managed superannuation and accounting services investments have not been unaffected by the prevailing economic conditions, however have been consistent performers in those conditions.
"The earnings contribution from these areas have been in line with FY08 and this area has proven to be a solid defensive asset."
Due to a prudent approach and the reduction in debt levels in 2009, Prime has a low gearing level with net debt of $6.5 million as at 30 June 2009, equating to a gearing level of about 10 per cent.
The firm plans to continue its debt reduction policy balanced by an appropriate dividend program heading into 2010, Madder said.
Prime directors do not expect to pay a dividend for the 2009 financial year, he said.
