The parent company of Professional Investment Holdings (PIH) has attributed part of its $13 million loss to an increase in client claims against its local and international advice group as well as costs linked to post-merger expenses and government reform.
Figures from Centrepoint Alliance's full-year report for the period ending 30 June 2011 found the company reported a net loss after tax of $13.1 million.
PIH's Australian advice and investment products and services division, Professional Investment Services, contributed close to $1 million to the loss, with the group's international advice and investment products and services business reporting a $3 million loss, the report said.
"The FY 2011 result for the Australian advice and investment products and services businesses was impacted by several large non-recurring costs and adjustments, some of which are merger-related and some of which have been classified as pre-merger costs if accounting for a standard acquisition and hence would not have been expensive in the merged entity," it said.
Of the losses, provisions for client claims stood at more than $6 million, with merger-related expenses of more than $1.3 million.
The company also spent more than $1.1 million on redundancies and termination costs, with impairments to intangible assets of close to $1.8 million, the report said.
In regards to other expenses, the company has $530,000 in professional fees linked to its ASIC enforceable undertaking and professional fees of more than $1.7 million for agribusiness product actions.
"The outlook for the advice and investment products and services business of PIH is linked to a significant degree with the fortunes of the global economy and resulting asset and stock market values," the company said.
"There are also significant challenges being faced in the financial services sector with the imminent introduction of the current government's Future of Financial Advice reforms and the uncertainty and volatility that this is creating."
Centrepoint was "well prepared and well positioned" to build on PIH's current position, the company said.
Meanwhile, Centrepoint's insurance premium funding business traded profitably over the financial year.
