The Directors of Countplus Limited (CUP) report a Consolidated Net Profit before Tax result of $21.8m (up 67%) and a Net Profit after Tax result of $14.0m (up 41%) for the year ended 30 June 2016. This increase of 41% is due to the fair value gain on our investment in Class Limited of $11.4m (after tax) which was partially offset by a $2.7m impairment expense and a higher tax expense relating to the tax deconsolidation of 3 Member Firms under our Direct Equity Plan and the disposal of 1 Member Firm. Profit attributable to Owners of Countplus Limited was $13.4m (up 35%) which is after the completion of the three Member Firm buybacks, which better positions CUP for the future by aligning Member Firm interests with shareholders.
A recorded presentation of the Countplus 2016 full year results, presented by the CEO and CFO will be accessible via Board Room Radio later today.
1. Management Comment
The strong Net Profit Before Tax (NPBT) performance is due to the fair value gain on our investment in Class Limited. Countplus Limited together with its subsidiaries owned approximately 5.4% equity in Class Limited at 30 June 2016. This has been an outstanding long term investment for Countplus following Class Limited’s successful IPO in December 2015. A number of institutional analysts have maintained a buy rating following the recent release of the Class FY16 financial results which reported a 71% increase in net profit after tax (before one-off IPO expenses).
The Company’s flat net revenue reflect continued subdued trading conditions in the accounting/business services area. Our full year results have been impacted by non-recurring cost relating to ADVICE389 and BLUE789 and the goodwill impairment of two accounting businesses.
Financial planning is continuing to see growth albeit slower (up 1.3%) across Member Firms. The group’s largest firm, Total Financial Solutions continues to benefit from the impact of new firms joining their network. Including our Associate Hood Sweeney, the Countplus Group has over $5 billion funds under advice (FUA).
Our shareholding in our largest equity accounted associate, South Australian based firm Hood Sweeney, increased from 26% to 32% as a result of a share buyback without an additional investment from Countplus.
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