WT Financial Group CEO Keith Cullen attributes the firm’s expected 33.5 per cent revenue increase to quality over quantity.
Announced to the ASX on Tuesday morning, the group’s indicative results for 1H25 show underlying revenue is up 33.5 per cent to $106.3 million (versus $79.6 million in the previous corresponding period).
Net profit before tax (NPBT) for the underlying business is expected to be up 35.8 per cent from $1.81 million to $2.45 million, and there will be a “nil net impact from one-off income/expenses” which results in an expected statutory NPBT of $2.45 million.
Cullen tells Professional Planner this increase is off the back of having their variable licensee fee model that takes a slice of practice revenue rather than a fixed fee and not “chasing” advisers.
“It’s a reward for licensees or advice networks who have their business model aligned with that of their practices,” Cullen says.
“If you’re in a fixed fee per adviser model then your only path to growth is more advisers. You tell me where the more advisers are coming from.”
But while Cullen is bullish on this model for WT, he’s still wary of the need for more advisers to serve more Australians. Ahead of next week’s sold out Advice Policy Summit, hosted by Professional Planner at Old Parliament House in Canberra, Cullen argues getting the education standard fixed to include a broader array of relevant degrees will help boost the number of new entrants.
“That’s an enormous growth opportunity because we can broaden the profession considerable,” Cullen says.
“If we get that fixed, we’ll go from 15,000 to 25,000 advisers within the space of three or five years.”
Wealth Data reported 15,531 advisers listed on the ASIC Financial Adviser Register, as of 30 January.
In other figures released during Tuesday’s update, earnings before interest and tax (EBIT) for the underlying business is expected to be up 19.6 percent to $2.7 million (versus $2.33 million in the previous period), after total operating expenses of $6.95 million (versus $5.38 million) and depreciation and amortisation of $286,000 versus ($320,000).
The current expectation for dividends will be 0.20 cents per share, bringing dividends in the past 12 months to 0.70 cents.
The firm is yet to finalise its expected tax position but anticipates no cash tax liability will arise due to the benefit of carried-forward tax losses. WT also has a franking credit balance which will allow the interim dividend to be fully franked.
The company reported a total of 342.19 million shares valuing the company at $44.84 million, with 1.5 million in options, and 1 million in performance rights on issue as of 31 December 2024, after issuing 2.91 million shares under its dividend reinvestment plan and 1 million performance rights under its employee equity incentive scheme.
Spring Financial Group – then a diversified business to consumer financial services business covering wealth and mortgage broking – acquired Wealth Today in 2017 creating the WT Financial Group.
“We came into the space in the wake of the [Hayne] royal commission,” Cullen says, noting the investment thesis was the profession just needed to get its “mojo” back.
“We made a conscience decision to be here knowing what the business environment looks like and everybody else has been adjusting and trying to work out what their business model looks like and we willing ran into the – what was at that time – a burning building.”
