Announcing its results for the 2023–24 financial year, the company saw a $3.8 million loss following a $1.9 million loss in the previous financial year – marking a 102 per cent decline.
Clime’s FY23–24 result included an operating loss of $1.6 million, non-cash amortisation and depreciation charges of $1.36 million, and non-cash asset impairment expense of $0.85 million.
In May 2024, the firm announced its plans to divest Madison Financial Group and WealthPortal to rival licensee Infocus for $2 million, which was officially completed on 30 June. According to Clime, the Madison business reported a loss of $460,000 in FY23–24.
Clime also recently announced the departure of its group CEO Annick Donat, who stepped down on 31 July after three years in the role. The firm has since appointed Michael Baragwanath as acting managing director.
“The financial year 2024 continued a challenging period for Clime Investment Management, extending the difficulties experienced in 2023,” Clime chairman John Abernethy said.
“As a result, the board took proactive measures in the second half of the year, initiating the divestment of Madison Financial Group. This strategic move has already yielded positive results, significantly improving CIW’s cash flow and operating profit. As a result, there has been a promising turnaround in CIW’s outlook, as seen in the encouraging trading activity in the early weeks of FY25.”
Abernethy reaffirmed that the Madison business “added significantly” to the cost of the business and posed further risk without “any real benefit” to its internal advice division.
“Further, the licensing business had stagnated inside a market for financial advice that was declining under the weight of regulation and growing industry costs. In summary, the board determined that the group was devoting too many resources, and therefore costs, to Madison which was contributing only about 20 per cent to our group revenue and was in an operational loss position,” he said.
Following the sale, Clime has now returned to operating profit in the opening months of FY24–25 and is targeting a minimum $2 million annual operating profit, the firm stated.
Its funds under management (FUM) also rose to $1.6 billion from $1.3 billion due to an investment management mandate of $240 million obtained towards the end of the financial year.
The chairman continued: “I can confirm that the outlook for CIW, in FY25, is for an operating result that will benefit from the significant cost reductions that will directly return CIW to sustainable profitability.
“We believe the company is on a clear path to recovery, and we are confident that the value of the company’s shares will improve over the next 12 months. As we grow, we anticipate that our operating margin will surpass 15 per cent (return on revenue) in FY25, putting us on track to achieve our target of around 30 per cent return in FY26–27.”
From the outside looking in there’s 2 people at the centre of this mess and that’s the founder and former CEO they have eroded shareholder value as a result of their extremely poor leadership. You only have to look at the recent AFR article to understand the character of these 2 people, publicly embarrassing themselves they should be ashamed. One is now gone so there’s some hope for Clime to turn things around but with the founder still involved that will be an uphill battle.
Very easy to make disparaging comments without disclosing who you are. Doesn’t reflect well on your integrity.
Said one anonymous to another..
I have been watching this company for sometime. They have made a couple of good acquisitions around advice and what looks like done nothing to support and drive growth and lost key leader and seen no future leadership so it was probably time to try and sell if you don’t know how to build it. Begs the questions why did you buy it. A declining growth in their own funds and I cant quite see except for one individual who has been making the investment decisions in there. After recent media in the Fin Review obviously there is trouble within the group. I am not sure how shareholders have allowed the CEO to have remain for so long and I see the Chairman is the founder which can only mean they both needed to be held to account. Looking at their market cap it honestly might be time to go private and see what is salvageable from here.
JA has been at the wheel for far to long , AD was ideal as a licensee head , but not an ASX fund manager / come licensee trying to get planners to write their own under performing SMA’s and funds. Cannot understand why the board spill for JA to go some time back did not succeed and give shareholders and the advisers of the time a new future .
The board spill was put by one shareholder who got absolutely no support from other shareholders. If you read the ASX release the shareholders now have a profitable company and advisors have joined Infocus.
What a disaster. The person running the Madison Group, and we all know who it is, could not run any type of business. No experience and no idea of what she was doing. It is unfortunate. The planners within the Madison Group must be filthy that the license has been left to rot as a result. It use to be run by good people, and now it is just a laughing stock. A shame. The person who brought this down needs to be run out of the industry. No idea.