WHK Group will refrain from aggressively acquiring major financial planning boutiques amid market volatility which threatened to grapple the company's earnings, the firm's managing director Kevin White has said.
WHK announced on Friday that earnings will be dented due to sluggish demand for financial planning services and lower contributions from member firms.
The Melbourne-based firm warned that cash earnings growth will be less than the 15 per cent to 20 per cent it expected for the year to June 30.
WHK's earnings before interest, tax and amortisation of intangible assets (EBITA) is expected to come in at $50 million for the year to June 30, White said.
That figure is a 23 per cent gain from the prior comparative period.
However, it falls below the high-end of EBITA forecasts of $53.3 million which White and a consensus of analysts were hoping for.
WHK's shares slumped 6.5c cents or 5.1 per cent to $1.21 in trading on Friday.
The country's fifth-biggest accounting firm will look to consolidate its 22 tuck-in acquisitions, White said.
"I suppose our aspiration is essentially to grow each of our members firms in the accounting and financial planning area," White told InvestorDaily.
"[However] there are a lot of opportunities for us to make smaller accounting acquisitions and cross-sell them into financial planning."
WHK's funds under advice (FUA) stood at $9 billion, easing from $9.2 billion in December.
"The financial planning business has slowed down during since January and we think it's probably going to be slow until June," White said.
"The level of volatility and uncertainty has just made people reluctant to invest."
Another reason earnings would be clipped was because one of WHK's recent major takeovers - which he declined to name - was underperforming at an "abnormally high" level, White added.
