Financial services company Snowball Group has posted a rise in profit for the 2011 financial year, despite weak consumer sentiment and following its friendly merger with Shadforth Financial Group.
Pro forma net operating revenue gained 10 per cent to $117.2 million in the 12 months, driven by an uplift from acquisitions completed during the year, small positive organic growth in funds under advice (FUA), and financial advice, insurance, mortgage and broking fees, Snowball said yesterday.
Underlying net profit after tax increased 3 per cent to $26.9 million, while group FUA rose 6 per cent to $11.6 billion during the 12 months.
"Snowball has achieved a sound financial result for the 2011 financial year that is in line with expectations," Snowball managing director Tony Fenning said.
"We continue to invest in the business and are well positioned to capitalise on opportunities, small and large, with our net non-leveraged balance sheet."
Snowball had net cash of $18.4 million, which could be used to fund the final 2011 financial year dividend and future acquisitions, Fenning said.
The group was conducting due diligence on two financial planning practices that serviced high net worth and affluent clients, he said.
"Industry consolidation continues to occur at all levels and the group intends to maintain its disciplined acquisition strategy and focus on potential transactions that are strategic, value accretive and within the group's risk appetite," he said.
In the 2012 financial year, there would be a focus on successful integration of Snowball and Shadforth, executing strategic initiatives to deliver organic growth and undertaking further acquisitions at the appropriate time.
"We are experiencing a sustained period of volatility and weak consumer confidence. The current levels are below the average for the 2011 financial year," Fenning said.
"However, we are investing in the business to position the group for the improvement in the market conditions when it comes."
Snowball and Shadforth announced their merger in May and completed it in June.
