investor presentation hy 1213 live.ppt · 25 february 2013. 2 ... floor space and footprint...
TRANSCRIPT
Presented by
Interim results31 December 2012
Christopher Kelaher, Managing DirectorDavid Coulter, Chief Financial Officer25 February 2013
2
December 2012 highlights
Strong FUMA growth –improved markets, M&A
Strong platform flow, June halves benefit from tax y/e
Plan B acquisition exceeded expectations
Flagship platforms: Pursuit (IFA), Spectrum (Corporate Super); and TPS (Bridges aligned advisers)
$282m
$397m
$356m
1H 2011/12 2H 2011/12 1H 2012/13
Flagship Net Flows26%
$76.9b $76.7b
$85.5b
1H 2011/12 2H 2011/12 1H 2012/13
FUMA11%
$48.7m$47.7m
$50.9m
1H 2011/12 2H 2011/12 1H 2012/13
Statutory NPAT / UNPAT
UNPAT pre‐amortisation
$46.1m
Statutory NPAT:
($26.7m) $33.2m
5%
3
Results highlights
* Movement compared to 1H 2011/12 # Source: Super ratings (net of fees) ^ Movement compared to 30 June 2012
Statutory NPAT UNPATpre-amortisation FUMA Strategic
achievements
$33.2m $50.9m 5%* $85.5b 11%^
DKN UNPAT $6.2m (up 33% on 6 months to Dec 11),Plan B UNPAT $1.5m Oct –Dec 12, immediately accretive
Statutory NPAT variability driven by non operational, largely non cash items
Result benefited from acquisitions, improved market conditions and strong stockbroking deal flow
Average FUMA for the period $81.4b (up 7%) Plan B recurring synergies of
$10m pa expected from FY14
Pre-tax operating cash flow of $52.8m
Plan B annualised Underlying Basic EPS 2.0 cps
Average gross margin 0.39% (0.39% 1H 11/12)
Top quartile Multimix Investment performance across most asset classes YTD#
Reported Basic EPS 14.3 cps
Underlying Basic EPS 22.0 cps (up 5%) Plan B Group adds $3.2b to
FUMASecond phase brand campaigndue for roll out 2H 2012/13
Fully franked 19.5 cps interim dividend Record Date - 14 March 2013. To be paid -10 April 2013.
Platform Management and Administration segment generates 65% of Group UNPAT
Flagship net flows continue to build market share
Strong balance sheet with low gearing and recurring high cash flow
4
Sustained performance underpins overall strategy
The Corporate segment recorded an UNPAT pre-amortisation of ($10.6m) 1H12/13, ($7.4m) 1H11/12
Strength of underlying business enables M&A
UNPAT pre-amort $9.8m, Avg FUA up $1.9bn Significant improvement from expanded footprint
UNPAT pre-amort $33.0m, Avg FUA up $1.9bn Core business generating recurring strong returns
UNPAT pre-amort $16.1m, Avg FUM down $2.0bn Investors switching to multi-managers
UNPAT pre-amortisation $2.6m, Avg FUS up $1.4bnSteady income stream, Plan B opportunities
5
Acquisitions fuel accretive growth
Success with recent acquisitions Plan B acquisition immediately accretive
- $1.5m UNPAT contribution for 3 months to Dec 2012- $1.1m pre tax synergies to date, approx $10m* in 2014- Annualised Underlying EPS contribution 2.0 cps in 2012/13
Plan B employees aligned, engaged and contributing
DKN fully integrated, 6 month result $6.2m (up 33% on pcp)- $4.7m contribution net of financing costs- 2.0 cps contribution to 1H 2012/13 Underlying EPS- recurring synergies $4.6m pa pre-tax
FUMA added via acquisitions totals $10.7b in the last two years
* Excludes potential future product integration
6
Plan B integration update
What has happened
Determined a roadmap for product rationalisation
Efficient realignment of senior management
Reviewed material contracts – outsourced
services brought in-house
Group’s discounts applied to supplier contracts
Ongoing integration tasks
Primary focus on integration and consolidation
RSE rationalisation
Floor space and footprint reduction
7
Synergy realisation based on experience Acquisition of IOOF Global One (ex Skandia) 2009
$27m pre-tax synergies Approximately 170 FTE reduction from a base of 180 $4b FUA successor fund transfer and elimination of 130 MIS’s
Acquisition of AWM 2009 $31m pre-tax synergies Significant FTE reduction, legacy platforms rationalised,
operations streamlined and simplified Floor space and footprint harmonised for capital city head
offices and data centres
Efficient and effective value accretion
8
4.9%
4.2%4.4%
5.4%
7.4%
11.0%
$620m
$630m
$640m
$650m
$660m
$670m
$680m
$690m
$700m
Jun‐11 Sep‐11 Dec‐11 Mar‐12 Jun‐12 Sep‐12
Flagship 12mth netflow (LHS) Flagship netflow marketshare
Broader reach translating to improved market share
Source: Morningstar Market Share Data at 30/09/2012
9
The expense of complex regulatory change is contained within this result FoFA, MySuper, Superstream and FATCA are concurrent
Increased emphasis on Product team resourcing to meet government deadlines Costs are internal, largely opportunity cost, and expected to be
stable
Expenditure confined to headcount resourcing
Minimal draw on capital expenditure
Continued focus on regulatory changes
10
David CoulterChief Financial Officer
11
Reported NPAT $33.2m $46.1m
Reported Basic EPS (cents) 14.3cps 19.9cps
Underlying NPAT (pre-amort) $49.8m $(0.3m) $1.5m $50.9m $48.7m
Underlying EPS (cents) 21.5cps (0.1cps) 0.6cps 22.0cps 21.0cps
FUMA $82.4b - $3.2b $85.5b $76.9b
Gross Margin % 0.37% - 1.03% 0.39% 0.39% -
DPS (cents) 19.5cps 19.0cps 3%
11%
5%
5%
(28%)
(28%)
1H 12/13 1H 11/12 VARIANCE (%)IFL (ex-Plan B)
Financing Costs Plan B
Financial overview
12
Reconciliation to statutory result
Detailed explanation of each reconciling line item provided in Appendix J
Impairment, deferred tax and Plan B have had a material non cash impact on reported NPAT
Reported v Underlying EPS calculations use the respective profit amounts above with the same average number of shares
$'M 1H 12/13 1H 11/12
Reported NPAT 33.2 46.1Amortisation of intangible assets 11.1 9.5
Impairment of goodwill 4.6 -
Acquisition transaction costs 0.7 2.7
Termination and retention incentive payments 3.9 2.2
Recognition of Plan B onerous lease contracts 3.0 -
Fair value gain on investment in DKN - (9.6)
Write-down of DKN leasehold improvements - 0.3
Amortisation of DTL recorded on intangible assets (2.6) (0.3)
Reinstatement of Perennial non-controlling interests (0.7) (1.5)
Income tax attributable (2.2) (0.8)
Underlying NPAT (pre-amortisation) 50.9 48.7
13
Contribution by line item
Financing Costs: Other Revenue - $0.4m borrowing costs, Operating expenditure - $0.1m loan line fees^ A reconciliation of IFL segments excluding Plan B and DKN is provided in Appendix A
Additional 3 months of DKN has contributed $2.4m UNPAT pre-amortisation net of an extra $850k financing costs
IFL UNPAT pre-amortisation excluding impact of acquisitions of Plan B and DKN of $45.0m (1H 2011/12 $47.3m)^
$M IFL (ex-Plan B)
Financing Costs
Plan B 1H 12/13 1H 11/12 Change on pcp (%)
Gross Margin 145.7 - 8.7 154.4 141.5 9%
Other Revenue 36.3 (0.4) 0.1 36.0 33.8 7%
Operating Expenditure (113.2) (0.1) (6.6) (119.8) (108.0) -11%
Equity Accounted Profits 4.1 - - 4.1 4.2 -4%
Net non cash (Ex. Amortisation) (4.0) - (0.1) (4.1) (3.8) -7%
Underlying Profit Before Tax, Amortisation 68.8 (0.5) 2.2 70.5 67.7 4%
Income Tax & NCI (19.1) 0.1 (0.7) (19.6) (19.0) -3%
Underlying NPAT (pre-amortisation) 49.8 (0.3) 1.5 50.9 48.7 5%
Significant Items/Amortisation (17.7) (2.6) -572%
Reported NPAT 33.2 46.1 -28%
14
Australian Equities38%
(PCP: 37%)
InternationalEquities
14% (PCP: 14%)
Property6% (PCP: 5%)
Fixed Interest/Cash
38% (PCP: 41%)
Other4% (PCP: 3%)
Segment performance - Platform
Flagship net flows continue ahead of industry
65% contribution to group UNPAT
Margin uplift
$32.3m
$27.4m
$33.0m
0.74%0.70% 0.72%
1H 2011/12 2H 2011/12 1H 2012/13
UNPAT Gross Margin %
1H 12/13 1H 11/12 CHANGEGross Margin ($'M) 91.0 86.2 6%Gross Margin % 0.72% 0.74% (0.02%)UNPAT ($'M) 33.0 32.3 2%Reported NPBT ($'M) 41.3 40.7 1%AVG FUA ($'B) 25.2 23.3 8%
15
Australian Equities44%
(PCP: 44%)
International Equities
7% (PCP: 5%)Property
5% (PCP: 7%)
FixedInterest/Cash
42% (PCP: 44%)
Other2% (PCP: 0%)
Segment performance – Investment Management
Multimix top quartile performance rankings YTD^
UNPAT impacted by Perennial outflows
Product mix relatively neutral impact on margins
^ Source: Super Ratings (net of fees)
$17.4m $18.1m$16.1m
0.25%0.28%
0.26%
1H 2011/12 2H 2011/12 1H 2012/13
UNPAT Gross Margin %
1H 12/13 1H 11/12 CHANGEGross Margin ($'M) 37.6 38.3 (2%)Gross Margin % 0.26% 0.25% 0.01%UNPAT ($'M) 16.1 17.4 (7%)Reported NPBT ($'M) 16.3 24.4 (33%)AVG FUA ($'B) 28.4 30.4 (6%)
16
Australian Equities47%
(PCP: 45%)
International Equities
7% (PCP: 7%)Property
2% (PCP: 2%)
Fixed Interest/Cash
43% (PCP: 46%)
Other1% (PCP: 1%)
Segment performance – Financial Advice & Distribution
Strong stockbroking deal flow drives UNPAT up $2.2m (ex DKN, Plan B)
Over 1,000 aligned advisers
DKN extra 3 months adds $3.9m
$3.7m
$8.8m$9.8m
0.05%
0.10%0.12%
1H 2011/12 2H 2011/12 1H 2012/13
UNPAT Gross Margin %
1H 12/13 1H 11/12 CHANGEGross Margin ($'M) 14.6 6.1 139%Gross Margin % 0.12% 0.05% 0.06%UNPAT ($'M) 9.8 3.7 164%Reported NPBT ($'M) 8.3 0.6 1,274%AVG FUA ($'B) 24.5 22.6 8%
17
Segment performance – Trustee Services
Non cyclical businesses provide stability in volatile markets
Plan B complementary business presents sound trustee opportunities
$2.7m
$2.1m
$2.6m
0.07% 0.07% 0.07%
1H 2011/12 2H 2011/12 1H 2012/13
UNPAT Gross Margin %
1H 12/13 1H 11/12 CHANGEGross Margin ($'M) 11.3 10.8 4%Gross Margin % 0.07% 0.07% - UNPAT ($'M) 2.6 2.7 (6%)Reported NPBT ($'M) 3.5 3.8 (9%)AVG FUS ($'B) 31.0 29.6 5%
18
$108
.0m
$119
.8m
$11.6m ($3.4m)
$2.9m
($0.2m)
$0.9m
Base Opex 1H 11/12 Synergies realised DKN/Plan B
FTE IT Marketing/Other Opex 1H 12/13
Cost constraint a continuing feature• Plan B synergies to drive further
savings
• Further marketing initiatives planned in 2H 2013
• IT investment stable since Jan 2011
Had Plan B operated without IOOF efficiencies, i.e normalised Plan B, add 3 months DKN
19
$113
.3m
$136
.1m
$138
.7m
$96.
2m
$52.8m
($4.9m)
($25.1m)
$1.9m
($41.8m)
June 12 Corp Cash Operating cashflows
Other Investing andFinance
Tax payments Cash preAcq'n/Div
Plan B(net of borrowings)^
Dividends Paid Dec 12 Corp Cash
Cash flows to shareholders
^ Plan B Acquisition: $49.0m net borrowings, ($46.6m) acquisition price paid, $6.6m cash balances acquired, ($0.7m) acquisition costs, ($3.9m) termination and retention incentive payments, ($2.5m) dividend paid to Plan B Group shareholders
20
Strong funds growth augmented by M&A Funds Under Management, Administration, Advice and
Supervision (FUMAS) up $9.1b to $116.4b
Funds Under Management, Administration, Advice (FUMA) (exclsupervision) up $8.8b to $85.5b (11% increase v June 2012) Average FUMA ex-acquisitions $80.0b (up 10% v 1H 11/12) Perennial mandate losses continued at a lower rate
Plan B adds $3.2b to FUMA $1.6b Platform FUAdmin $1.2b Investment Management FUM $0.5b FUAdvice
Average gross margin 0.39% (1H 11/12 0.39%)
21
Flagship platforms taking market share
^ Plan B acquired FUMA $3,244m, Avenue $477m
$76.
7b
$76,690.8b$75,755.4b $75,755.4b $75,752.0b $75,564.4b $75,564.4b
$69.
9b
$85.
5b
$356m
($1,291m)
$189m
($192m) ($188m)
$3,720m
$6,258m
FUMA Jun 12 Platform Management& Administration
(Flagship)
InvestmentManagement
Funds Under Advice Platform Management& Administration
(Transition)
IOOF Global One AcquiredFUMA^
Market/Other FUMA Dec 12
22
Asset allocation
45% 44% 42%43%
39% 42% 44%
41%
$29.4b
6% 5% 5%
5%
$29.0b
9% 8% 8%
9%
$27.1b1% 1% 1%
2%
$30.9b $30.9b
Asset Allocation 10/11 Asset Allocation 1H 11/12 Asset Allocation 11/12 Asset Allocation 1H 12/13 FUMAS by Segment 31/12/2012
Australian Equities Fixed Interest / Cash Property International Equities Other
Funds Under Supervision
Financial Advice and Distribution
Investment Management
Platform Management and Administration
FUMA $76.7bFUMA $76.0bFUMA $76.9b
FUMA $85.5b
23
Christopher KelaherManaging Director
24
Regulatory reform implementation on track
Subject to change
FoFA
MySuper
SuperStream
November 2012 April 2013 July 2013 onwards
MySuper application process MySuper product launch
SuperStream platform changes
- rollovers
FoFA changes phase 1
FoFA changes phase 2
FoFA changes phase 3
Super 123 to Transact
25
Even better placed as an adviser’s ‘partner of choice’
Opportunities in IFA space as banks develop direct strategies
Market leading FoFA functionality for advisers Able to service any adviser business model Compliant, disclosed fees linked to specific service provided
New advice models to support employer sponsored superannuation Supporting scaled advice Enhanced referral models
26
IOOF strategic achievementsOrganic growth objective Achieved by…
More active advisers Significantly expanded active IFA footprint
Investment in technology and infrastructure Lower reliance on external software
Increased market share of net flows 11% for flagship platforms, up from 4% one year earlier
Acquisition growth objective Achieved by…
Maintain financial flexibility Lean balance sheet, prudently geared
Reputation which produces opportunities Continually approached; buyers market, attractive asset prices
Leverage experience as a consolidator6 major acquisitions integrated in 5 years$73m pre-tax synergies Diligent acquirer
27
Wealth management industry remains compelling
Ever changing regulatory landscape increases complexity
Complexity increases the need for advice, administration and management
Strong system growth assured with ageing population and SGC increase
^ Source: Rice Warner Actuaries, October 2012
$1,342B
$1,884B
$3,334B
2011 2016 2026
Total Superannuation Market^
148%
28
Outlook 2012/2013
Higher FUMA starting base for 2H 12/13 bodes well for full year
Excluding acquisitions*, and subject to markets, IOOF’s 2H 12/13 UNPAT should exceed1H 12/13
Added impetus of a full 6 months of Plan B, a full year of DKN and the associated synergies
M&A landscape continues to provide a number of meaningful opportunities
* Excluding acquisitions refers to the impact of Plan B and any future acquisitions
29
Questions?
30
Appendices
31
Appendix A: Segment Summary
^ DKN Group 1H 2011/12 result for 3 months post acquisition only
$M 1H 2012/13 1H 2011/12 CHANGE
Platform (ex Plan B) 31.5 32.3 (3%)
Investment Management (ex Plan B) 16.2 17.4 (7%)
Financial Advice & Distribution (ex DKN, Plan B) 3.5 1.4 145%
Trustee (ex Plan B) 2.4 2.7 (14%)
Corporate (ex Plan B) (8.6) (6.5) (32%)
IFL Group UNPAT (ex Acquisitions) 45.0 47.3 (5%)
DKN Group^ 6.2 2.3 173%
Plan B Group 1.5 - -
Financing costs - Plan B (0.3) - -
Financing costs - DKN (1.5) (0.9) (64%)
UNPAT pre amortisation 50.9 48.7 4%
Amortisation of Intangibles (11.1) (9.5) (16%)
Acquisition related significant items (2.8) 3.0 (191%)
Other significant items (3.8) 3.9 (199%)
Reported NPAT 33.2 46.1 (28%)
32
Appendix B: Platform Management and Administration
$'M Platform(ex Plan B) Plan B 1H 12/13 1H 11/12 Change on pcp
(%)
Revenue 168.0 4.0 172.0 164.9 4%Direct Costs (80.9) (0.1) (81.0) (78.7) -3%Gross Margin (GM) 87.1 3.9 91.0 86.2 6%GM % 0.70% 0.95% 0.72% 0.74%
Other Revenue (0.0) - (0.0) - -Share of Equity profit/loss (0.0) - (0.0) - -Operating Expenditure (40.6) (1.7) (42.4) (38.7) -9%Net Non Cash (1.3) (0.0) (1.3) (1.1) -16%Income Tax Expense/N.C.I (13.7) (0.6) (14.3) (14.1) -1%UNPAT pre-amortisation 31.5 1.5 33.0 32.3 2%Significant Items (0.0) (0.0) (0.1) 0.1 Amortisation (5.9) (0.1) (6.0) (5.7) Income Tax Expense/N.C.I 13.7 0.6 14.3 14.1 Reported NPBT 39.2 2.0 41.3 40.7
Average FUA ($'b) 24.5 1.6 25.2 23.3
33
Appendix C: Investment Management
$'M Inv. Mgmt (ex Plan B) Plan B 1H 12/13 1H 11/12 Change on pcp
(%)
Revenue 62.9 0.8 63.7 62.2 2%Direct Costs (26.1) - (26.1) (23.9) -9%Gross Margin (GM) 36.8 0.8 37.6 38.3 -2%GM % 0.26% 0.25% 0.26% 0.25%
Other Revenue 1.2 - 1.2 1.8 -33%Share of Equity profit/loss 3.5 - 3.5 3.9 -11%Operating Expenditure (17.9) (0.9) (18.8) (17.8) -6%Net Non Cash (0.7) (0.0) (0.7) (0.7) -2%Income Tax Expense/N.C.I (6.7) 0.0 (6.6) (8.1) 18%UNPAT pre-amortisation 16.2 (0.1) 16.1 17.4 -7%Significant Items (5.4) 0.0 (5.4) - Amortisation (1.1) - (1.1) (1.1) Income Tax Expense/N.C.I 6.7 (0.0) 6.6 8.1 Reported NPBT 16.5 (0.1) 16.3 24.4
Average FUM ($'b) 27.9 1.2 28.4 30.4
34
Appendix D: Financial Advice and Distribution$'M FAD
(ex Plan B) Plan B 1H 12/13 1H 11/12 Change on pcp (%)
Revenue 78.3 5.5 83.9 68.0 23%Direct Costs (67.1) (2.2) (69.3) (61.9) -12%Gross Margin (GM) 11.2 3.3 14.6 6.1 139%GM % 0.16% 2.66% 0.12% 0.05%
Other Revenue 34.2 0.1 34.3 28.8 19%Share of Equity profit/loss 0.6 - 0.6 0.3 83%Operating Expenditure (31.5) (3.3) (34.7) (28.8) -21%Net Non Cash (1.4) (0.0) (1.5) (1.5) 2%Income Tax Expense/N.C.I (3.5) (0.0) (3.5) (1.2) -188%UNPAT pre-amortisation 9.7 0.1 9.8 3.7 164%Significant Items (0.4) (0.5) (1.0) (1.7) Amortisation (1.8) (2.3) (4.1) (2.6) Income Tax Expense/N.C.I 3.5 0.0 3.5 1.2 Reported NPBT 11.0 (2.7) 8.3 0.6
Average FUA ($'b) 27.6 0.5 24.5 22.6
35
Appendix E: Trustee Services$'M
Trustee Services
(ex Plan B)Plan B 1H 12/13 1H 11/12 Change on pcp
(%)
Revenue 10.5 0.7 11.2 10.9 3%Direct Costs 0.1 - 0.1 (0.0) 439%Gross Margin (GM) 10.6 0.7 11.3 10.8 4%GM % 0.07% - 0.07% 0.07%
Other Revenue - - - - -Share of Equity profit/loss - - - - -Operating Expenditure (7.2) (0.4) (7.6) (6.9) -10%Net Non Cash 0.0 (0.0) 0.0 (0.1) 108%Income Tax Expense/N.C.I (1.0) (0.1) (1.1) (1.2) -5%UNPAT pre-amortisation 2.4 0.2 2.6 2.7 -6%Significant Items (0.2) - (0.2) (0.1) Amortisation - - - - Income Tax Expense/N.C.I 1.0 0.1 1.1 1.2 Reported NPBT 3.2 0.3 3.5 3.8
Average FUS ($'b) 31.0 - 31.0 29.6
36
Appendix F: Corporate and other
$'M Corporate (ex Plan B)
Financing Costs Plan B 1H 12/13 1H 11/12 Change on pcp
(%)
Revenue 0.2 - - 0.2 - -Direct Costs (0.2) - - (0.2) 0.1 -276%Gross Margin (GM) 0.0 - - 0.0 0.1 -48%
Other Revenue 0.8 (0.4) 0.0 0.5 3.2 -85%Share of Equity profit/loss - - - - - -Operating Expenditure (16.0) (0.1) (0.3) (16.4) (15.8) -4%Net Non Cash (0.7) - 0.0 (0.7) (0.4) -88%Income Tax Expense/N.C.I 5.8 0.1 0.0 5.9 5.6 6%UNPAT pre-amortisation (10.0) (0.3) (0.2) (10.6) (7.4) 44%Significant Items (1.0) - (4.6) (5.6) 6.0 Amortisation - 0.2 (0.2) 0.0 (0.1) Income Tax Expense/N.C.I (5.8) (0.1) (0.0) (5.9) (5.6) Reported NPBT (16.8) (0.3) (5.1) (22.2) (7.0)
37
Appendix G: Segment UNPAT reconciliation to statutory note 5
$'MPlatform Management and Administration
Investment Management
Financial Advice and Distribution
Trustee Services
Corporate and other
Revenue 172.0 63.7 83.9 11.2 0.2 Direct Costs (81.0) (26.1) (69.3) 0.1 (0.2) Gross Margin (GM) 91.0 37.6 14.6 11.3 0.0
Other Revenue - 1.2 34.3 - 0.5 Share of Equity profit/loss (0.0) 3.5 0.6 - - Operating Expenditure (42.4) (18.8) (34.7) (7.6) (16.4) Net Non Cash (1.3) (0.7) (1.5) 0.0 (0.7) Income Tax Expense/N.C.I (14.3) (6.6) (3.5) (1.1) 5.9 UNPAT pre-amortisation 33.0 16.1 9.8 2.6 (10.6) Significant Items
Impairment - (4.6) - - - Acquisition transaction costs - - - - (0.7) Termination and retention incentive payments (0.1) (0.8) (1.0) (0.2) (2.0) Recognition of Plan B onerous lease contracts - - - - (3.0)
Amortisation (6.0) (1.1) (4.1) - 0.0 Reverse out:
Income Tax Expense/Non Controlling Interests 14.3 6.6 3.5 1.1 (5.9) Reported segment profit before income tax 41.3 16.3 8.3 3.5 (22.2)
APPENDIX H
RECONCILIATION TO STATUTORY FINANCIALS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 DECEMBER 2012
2012 2011
Statutory
Note Ref. Platform Inv. Mgmt
Trustee
Services
Corporate and
other
$'m $'m $'m $'m $'m $'m $'m
Gross Margin
Management and Service fees revenue 6 167.6 60.5 76.5 9.7 - 278.4 262.8
Other Fee Revenue 6 4.4 3.2 7.3 1.4 0.2 16.5 9.3
Service and Marketing fees expense 7 (76.7) (22.8) (67.5) (0.0) (0.1) (131.4) (121.6)
Other Direct Costs 7 (2.9) (3.3) (0.4) 0.1 (0.1) (6.4) (5.2)
Amortisation of deferred acquisition costs 7 (1.5) - (1.4) - - (2.8) (3.8)
Total Gross Margin 91.0 37.6 14.6 11.3 0.0 154.4 141.5
Other Revenue
Stockbroking revenue 6 - - 31.6 - - 31.6 27.2
Interest income on loans to directors of controlled and
associated entities 6- 0.2 0.1 - 0.0 0.2 0.3
Interest income from non-related entities 6 - 0.2 0.7 - 1.3 2.3 3.7
Dividends and distributions received 6 - - - - 0.4 0.3 1.3
Fair value gain on investment in DKN 6 - - - - - - 9.6
Profit on sale of financial assets 6 - - 0.2 - - 0.2 0.6
Other revenue (incl. Fair Value Gains) 6 - 1.0 1.7 - 0.3 3.1 1.6
Finance Costs 8 - (0.2) (0.1) - (1.5) (1.8) (0.9)
Other Revenue adjustments Below - - - - - - (9.6)
Total Other Revenue - 1.2 34.3 - 0.5 36.0 33.8
Equity Accounted Profits
Share of profits of associates and jointly controlled
entities accounted for using the equity method SOCI*(0.0) 3.5 0.6 - - 4.1 4.2
Total Equity Accounted Profits (0.0) 3.5 0.6 - - 4.1 4.2
Operating Expenditure
Salaries and related employee expenses 7 (5.9) (10.6) (17.2) (4.6) (31.9) (70.2) (62.9)
Employee defined contribution plan expense 7 (0.4) (0.5) (1.3) (0.4) (2.4) (5.0) (4.6)
Information technology costs 7 (0.2) (0.7) (5.5) (0.1) (11.5) (18.0) (17.0)
Professional fees 7 (0.3) (0.3) (0.7) (0.0) (2.6) (4.0) (2.4)
Marketing 7 (0.5) (0.3) (2.3) (0.1) (0.8) (4.0) (4.2)
Office support and administration 7 (0.1) (0.3) (2.5) (0.3) (4.3) (7.5) (6.9)
Occupancy related expenses 7 (0.0) (0.6) (3.1) (0.1) (4.1) (7.8) (6.7)
Travel and entertainment 7 (0.6) (0.6) (0.7) (0.2) (1.1) (3.2) (3.1)
Corporate recharge N/A (34.4) (4.1) (1.3) (1.9) 41.8 - -
Other 7 - (0.6) - (0.0) 0.6 (0.0) (0.2)
Total Operating Expenditure (42.4) (18.8) (34.7) (7.6) (16.4) (119.8) (108.0)
Loss on disposal of non-current assets 7 - - (0.1) - - (0.1) (0.0)
Total Operating Expenditure (42.4) (18.8) (34.7) (7.6) (16.4) (119.8) (108.0)
Net non cash (Ex. Amortisation)
Share based payments expense 7 (0.6) (0.4) (0.4) 0.1 (0.7) (1.9) (1.7)
Depreciation of property, plant and equipment 7 (0.7) (0.3) (1.1) (0.1) - (2.2) (2.2)
Net non cash (Ex. Amortisation) (1.3) (0.7) (1.5) 0.0 (0.7) (4.1) (3.8)
Income Tax & NCI
Non-controlling Interest SOCI* - - (0.3) - - (0.3) 0.0
Income tax expense SOCI* (14.3) (5.7) (2.3) (1.1) 9.7 (13.7) (16.5)
Income tax expense/NCI adjustments Below (0.0) (0.9) (0.9) - (3.7) (5.6) (2.6)
Total Income Tax & NCI (14.3) (6.6) (3.5) (1.1) 5.9 (19.6) (19.0)
Underlying NPAT (pre-amortisation) 33.0 16.1 9.8 2.6 (10.6) 50.9 48.7
Significant Items .
Impairment 7 - (4.6) - - - (4.6) -
Acquisition transaction costs 7 - - - - (0.7) (0.7) (2.7)
Termination and retention incentive payments 7 (0.1) (0.8) (1.0) (0.2) (2.0) (3.9) (2.2)
Recognition of Plan B onerous lease contracts 7 - - - - (3.0) (3.0) -
Fair value gain on investment in DKN 6 - - - - - - 9.6
Write-down of DKN leasehold improvements 7 - - - - - - (0.3)
Income tax expense/NCI adjustments
Amortisation of deferred tax liability recorded on
intangible assets N/A- - 0.6 - 2.0 2.6 0.3
Reinstatement of Perennial non-controlling interests N/A - 0.7 - - - 0.7 1.5
Income tax attributable N/A 0.0 0.2 0.3 - 1.7 2.2 0.8
Total Significant Items - Net of Tax (0.1) (4.5) (0.0) (0.2) (1.9) (6.6) 6.9
Amortisation of intangible assets 7 (6.0) (1.1) (4.1) - 0.0 (11.1) (9.5)
Reported Profit/(Loss) per financial statements 27.0 10.6 5.8 2.4 (12.5) 33.2 46.1
* SOCI = Statement of Comprehensive Income
Note: Segment results include inter-segment revenues and expenses eliminated on consolidation
Financial
Advice &
Distribution
38
39
Appendix I
20.6c
22.0c
19.5c
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
Jun-09 Nov-09 Apr-10 Sep-10 Jan-11 Jun-11 Nov-11 Apr-12 Aug-12
(cen
ts)
Underlying EPS (cents) DPS (cents) ASX200 (RHS Base 100) IFL (RHS Base 100) ASX200 Financials Ex. A-REITs (RHS Base 100)
TSR = 105% June 2009 - December 2012 (23% annualised)
17c
18c
21c
18c
19c
22c
20.5c
21.8c23.7c
24.7c
21.0c
Dec ‐ 12
APPENDIX J
Explanation of items removed from UNPAT
Reinstatement of Perennial non-controlling interests: Embedded derivatives exist given the Group’s obligation to buy-back shareholdings
in certain Perennial subsidiaries if put under the terms of their shareholders’ agreements. IFRS deems the interests of these non-controlling
holders to have been acquired. Those interests must therefore be held on balance sheet as a liability to be revalued to a reserve each
reporting period. In calculating UNPAT, the non-controlling interest holders share of the profit of these subsidiaries is subtracted from the
Group result as though there were no embedded derivatives to better reflect the current economic interests of Company shareholders in the
activities of these subsidiaries.
In calculating its Underlying Net Profit After Tax (UNPAT) pre-amortisation, the Group reverses the impact on profit of certain, predominantly non cash,
items to enable a better understanding of its operational result. A detailed explanation for all such items is provided below.
Amortisation of deferred tax liability recorded on intangible assets: Acquired intangible asset valuations for AASB 3 Business
Combinations accounting are higher than the required cost base as set under newly legislated tax consolidation rules. A deferred tax liability
("DTL") is required to be recognised as there is an embedded capital gain should the assets be disposed of at their accounting values. This
DTL reduces in future periods at 30% of the amortisation applicable to those assets which have different accounting values and tax cost
bases. The recognition of DTL and subsequent period reductions are not reflective of conventional recurring operations and are regarded as
highly unlikely to be realised due to the Group's intention to hold these assets long term.
Amortisation of intangible assets: Non-cash entry reflective of declining intangible asset values over their useful lives. Intangible assets are
continuously generated within the Group, but are only able to be recognised when acquired. The absence of a corresponding entry for
intangible asset creation results in a conservative one sided decrement to profit only. It is reversed to ensure the operational result is not
impacted. The reversal of amortisation of intangibles is routinely employed when performing company valuations.
Impairment of goodwill: Non-cash entry which reflects a point in time valuation of assets which is unable to be reversed to profit in future
periods should a higher value be ascribed in future periods. The entry is not related to the conventional recurring operations of the Group.
Acquisition transaction costs: One off payments to external advisers by both Plan B Group Holdings Limited (Plan B) and IOOF in pursuit
of a successful acquisition which are not reflective of conventional recurring operations. These costs relate to the acquisition of DKN in the
prior comparative period.
Termination and retention incentive payments: Facilitation of restructuring to ensure long term efficiency gains, predominantly Plan B
related in the current period and DKN related in the prior comparative period, which are not reflective of conventional recurring operations.
Recognition of Plan B onerous lease contracts: Non-cash entry to record the expected costs of meeting the obligations under a Plan B
lease contract where the costs exceed the economic benefits expected to be received under it.
Fair value gain on investment in DKN (prior comparative period only): An initial 18.5% holding in DKN prior to its acquisition means this
is a business combination achieved in stages under AASB 3. The Group is therefore required to measure this previously held equity interest
in DKN at acquisition-date fair value and recognise the resulting gain in P&L. The initial entry ensures the assets acquired are held on balance
sheet at fair value, however the impact on profit is reversed as it is regarded as highly unlikely to be realised due to the Group's intention to
hold its investment in DKN long term.
Income tax attributable: This represents the income tax applicable to certain of the adjustment items outlined above.
41
Important notice This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Certain statements in the presentation relate to the future. Such statements involve known and unknown risks and uncertainties and other important factors that could cause the actual results, performance or achievements to be materially different from expected future results, performance or achievements expressed or implied by those statements. IOOF does not give any representation, assurance or guarantee that the events expressed or implied in any forward looking statements in this presentation will actually occur and you are cautioned not to place undue reliance on such forward looking statements.
This presentation has not been subject to auditor review.
Creating financial independence since 1846