WT Financial Group has seen a steep increase in profits and will be paying its first dividend to shareholders in seven years.
In its indicative financial year results published to the ASX on Monday, WT announced underlying net profit before tax (NPBT) is expected to increase 51.4 per cent to $4.4 million (versus $2.9 million in FY23).
“We’re proving what’s possible, but to a large extent we’ve only just begun,” WT Financial Group chief executive officer Keith Cullen tells Professional Planner.
“What we’ve is act on an acquisition, a consolidation strategy that we thought would position us and our advice networks to really take advantage of now what’s before the profession.”
However, Cullen says the work that has been put in has only planted the seeds for the future of the organisation.
“To a large extent, I don’t consider where we’ve got to in the last four years to have been having achieved anything other than get to the starting gate,” Cullen says.
The company is yet to finalise its tax position but estimates a statutory tax expense of around $900,000 which would lead to net profit after tax of $3.9 million. It’s less than the FY23 figure of $4.3 million, but that figure was inflated by an income tax benefit received in FY23 and flagged in its half-year results in February.
Revenue for the underlying business is expected to increase by 15.3 per cent to $185.1 million (versus $160.5 million in FY23).
Cullen says WT’s model shows the benefits of scale that can be achieved by having advice practices with proper alignment within that infrastructure.
“There’s no accounting for the value that a well-structured licensee can bring to the table for the advice practices in its network, whether that’s supporting M&A activity, supporting professional development, supporting recruitment,” Cullen says.
The firm described the results as the fourth consecutive year of “compounding growth”. It has resumed paying dividends to shareholders – a payout of 0.4 cents a share being the first declared since March 2017.
Shares in WTL closed at 8 cents, an increase of 12.68 per cent during the day and 167 per cent over the past five years.
“This will be a modest dividend for us but against the backdrop of having sent $2 million cash out the door throughout this same period, I’m really pleased with the outcome,” Cullen says, referring to the firm’s acquisition of Millenium3 last October.
Cullen says Millenium3 has transitioned smoothly into the group because the business was structured in a way that fit its own structures.
“That made it relatively straightforward as we needed to pick only a very few staff,” Cullen says.
“They were very critical staff for us because they’re the front-line practice support staff, so they’ve augmented our team really well, but it was probably the least complicated integration we’ve had to do.”
Before the acquisition of Millenium3, WT acquired risk advice stalwart Synchron in March 2022.
“It’s been quite a journey, bringing together what have been four very disparate businesses with different business models,” Cullen says, referring to Wealth Today, Sentry, Synchron and Millenium3.
“I’d say archaic business models and I don’t mean that as a criticism. They were business models that were founded when the profession had a completely different shape and future about it.”
