Interim results media release

22/02/2012

IOOF interim result

  • 46.1m Statutory result
  • $48.7m UNPAT Pre Amortisation result
  • 19 cents per share dividend fully franked


IOOF Holdings Limited (IOOF) has reported a $46.1m statutory profit and a $48.7m Underlying Net Profit After Tax (UNPAT), Pre Amortisation for the period ended 31 December 2011.

Commenting on the result for IOOF, Managing Director, Mr Chris Kelaher said “This result in challenging markets demonstrates IOOF’s resilience. While revenue is reflective of markets and broader industry trends, IOOF’s margins have remained steady.”


IOOF refers to UNPAT Pre Amortisation because it enables a better understanding of its operational result. This is achieved by removing the impact on profit of certain non-operational or non-recurring items, the majority of which are non-cash. The approach adopted is consistent from period to period and does not discriminate between positive and negative adjustments.1


DKN acquisition fully integrated


During the period, IOOF acquired DKN Financial Group, which has now been fully integrated into the group. Approximately 270 advisers were added to IOOF’s distribution network and $6.8 billion was added to IOOF’s Funds Under Advice.


Since acquisition, DKN has contributed $0.1m in reported profit or $2.3 million UNPAT Pre Amortisation in 3 months.1


FUMAS of $106.6 billion – flagship growth remains ahead of industry


As at 31 December 2011, IOOF had Funds Under Management, Administration, Advice and Supervision of $106.6 billion, which represents a $0.4 billion improvement since 30 June 2011.


Excluding Funds under Supervision relating to IOOF’s corporate trust business, IOOF’s FUMA increased $0.9 billion to $76.9 billion, assisted by the inclusion of funds associated with acquisitions during the period.


IOOF’s flagship platforms saw net inflows of $282m. This growth in FUMAS represents annualised growth via flows to IOOF’s flagship platforms of 6% compared with industry growth of 3%.2


Strategic investment in organic growth initiatives


Following on from the completion of IOOF’s simplification program, IOOF has a heightened focus on investment in organic growth initiatives including new products, branding and the continuous improvement of IT infrastructure.


In the past six months, IOOF has:

  • Enhanced its technology capabilities while at the same time reducing costs and reliance on external providers
  • Commenced an awareness campaign to create a stronger national presence, through the use of advertising on trams, buses, billboards and stadium sponsorship
  • Launched several new products including Pursuit Focus – a cost effective, fee for service offering that is FoFA and MySuper ready, and a favourably priced SMSF offering


Measured cost constraint a continuing feature

 

IOOF’s disciplined approach to cost constraint remains ever present. Investment in organic growth initiatives was highlighted when IOOF communicated its June 2011 result. This has resulted in a modest increase in costs in key technology and marketing areas identified at that time.


19c dividend declared fully franked


The Directors of IOOF have declared a fully franked 19c per share dividend to be paid on 4 April 2012. The record date will be 2 March 2012.


Commenting on the dividend, Mr Kelaher said “pleasingly for all shareholders, this 19c dividend is at the upper end of our dividend policy pay-out range of 60-90%.


Moreover it is a measure of IOOF’s strong balance sheet, high cash inflow and low gearing.”


Outlook for IOOF


With continuing market volatility, providing forecasts remains difficult, however IOOF’s disciplined approach to cost constraint will remain a feature.


IOOF is well placed to meet the upcoming regulatory deadlines with all flagship products already FoFA compliant with Fee For Service options available.

1 A list of items excluded from statutory profit is provided in the directors’ report accompanying the financial statements and also at p13, Appendix F and Appendix J of the interim results presentation for the period. These documents can be accessed at our website.


UNPAT Pre Amortisation and any other information noted as having been derived from it are not included in IOOF’s financial statements and notes to those financial statements.


Information not included in IOOF’s financial statements and notes to those financial statements has not been subject to audit review.

2 Morningstar Market Share Data at 30/9/2011 – Platform FUA