Financial services company Centrepoint Alliance has announced a half-year net profit after tax result of $700,000 – a 75 per cent drop on the corresponding period last year as the group goes through a period of transformation.
Total revenue for the half year ending 31 December 2015 was down 8 per cent to $24 million on the same period last year, the company said in an announcement to the ASX on Wednesday.
Centrepoint also announced an underlying net profit before tax of $3.2 million for the first half ended 31 December 2015, up 16 per cent on the prior period and down 26 per cent on the prior corresponding period.
Centrepoint has $12 million in cash as at 31 December 2015 and will issue an interim full franked dividend of 1 cent per share.
Centrepoint attributed the result to lower wealth fees following the implementation of a fee-for-service model, lower platform rebates and grandfathered income. The company also pointed to its "transformation" costs in premises restructuring and investment in salaried advice and IT systems.
"Advice fees were down $1.8 million with the introduction of a fee-for-service model and exit of non-core advisers, and product rebates were down $0.9 million on the previous corresponding period," the company said.
"Salaried advice and product revenues were up $1.6 million. Newly recruited practices have 'fee-free period' and [are] not impacting current year fee revenues."
Underlying profit for the wealth business was down 13 per cent to $3.5 million for the previous corresponding period. Revenue was also down 6 per cent on the previous corresponding period and sat at $15.4 million.
Despite this Centrepoint said that wealth's new salaried model was performing well after implementation and the company intended to recruit and develop quality practices with a focus on "independent" advice.
"We are pleased with the group's progress in executing on its strategy. The market environment in both business lines is challenging so it is particularly pleasing to see the transformation of the wealth business gaining momentum and the funding business growing its broker relationships and loans," Centrepoint chairman Alan Fisher said.
Managing Director, John de Zwart, said: "The momentum in the business is exciting as we continue to deliver on our strategy and provide leading solutions and support for professional independent advisers, brokers and their clients.
"The investments we have been making in our team and services will underpin growth in the coming periods. While the markets have been tough, the demand for quality professional advice by Australians has never been greater. We are very optimistic about the future for independent advisers."
Currently Centrepoint Alliance has 1,600 wealth advisers and $2.9 billion in funds under management.
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