Centrepoint reports ‘strong growth’ for FY22 as Diverger acquisition offer looms

Last November’s acquisition of ClearView’s advice businesses has attributed to Centrepoint Alliance’s (ASX: CAF) “strong growth” for the year ended 30 June 2022.

On Wednesday (24 August), the company reported a net profit after tax (NPAT) of $6.5 million — a year-on-year increase of over 100 per cent — which it said was driven by gross profit growth across the business and “successful integration” of the Clearview Advice integration.

Growth profit from customer contracts also jumped up 12 per cent to $3.2 million, which was again attributed to an increase in authorised representative fee revenue generated from the ClearView acquisition.

As at 30 June 2022, Centrepoint confirmed it had 517 licensed advisers on board, 175 of whom were brought in from the acquisition and an additional net growth of 27 advisers. Centrepoint also services 192 self-licensed practices representing 788 self-licensed advisers.

Centrepoint also reported $6.4 million in net cash from operations and a profit before tax of $2.57 million; a 66.3 per cent year-on-year increase.

Earlier this month, the Centrepoint board reported a fully franked dividend of 1¢ per share, which took the company’s fully franked ordinary dividends paid to 1.5¢ per share.

Looking ahead, Centrepoint said it remains positive about the business outlook and confirmed that a “strong pipeline of acquisition opportunities and discussions” are ongoing just weeks after Diverger reiterated its bid to acquire the company.

Diverger also released its FY22 results on Wednesday, in which the group again addressed the offer.

“... board and management continue to explore value accretive organic and inorganic opportunities to enhance returns to shareholders, consistent with our track record over the last two years,” a statement issued by Diverger read.

“Whilst more transformational transactions such as our offer to acquire Centrepoint Alliance remain strategically relevant, we remain focused on only proceeding where the returns to shareholders on invested capital are justified.”

In June, Diverger’s bid to acquire the listed advice group — which saw an offer to acquire all shares in the firm for a combination of cash and Diverger shares valued at $0.325 per share offer price — was rejected with the Centrepoint Alliance board saying at the time that it “does not believe the offer fairly reflects the strategic value” of the company.

In its results this week, Diverger reported a 26 per cent increase in net profit after tax to $3.75 million and a 36 per cent jump in revenue from continuing operations to $125.04 million.

The company also confirmed a customer base of 155 advice firms, 2110 limited advisers and 1,346 subscribing accounting firms.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.