Advice network focus drives WT Financial half-year profit

In an announcement to the ASX on Thursday morning, WT Financial reported an 8 per cent increase in EBITDA to $3.11 million for the first half of the 2023–24 financial year, while net profit before tax (NPBT) increased to $2.26 million, 7 per cent from $2.11 million in the prior corresponding period.

The firm attributed the improved earnings, in part, to “significantly improved gross profit of the group’s advice network operations”.

The group also said its networks of wealth and personal risk insurance advisers now collectively have in excess of $23 billion of assets under advice, as well as annual in-force personal insurance premiums of more than $430 million.

“The group’s focus is to ensure strong alignment in culture, values and upside with the advice practices it supports,” WT Financial chief executive Keith Cullen said.

“That focus led to some rationalisation of the group’s networks last financial year which the directors view as now being rewarded with significantly improved gross profit for the group’s advice network operations – with our core B2B segment recording a 19 million improvement in EBITDA to $3.78 million.

“Along with disciplined operating cost containment, this has contributed to consolidated EBITDA profit being up 8 per cent to $3.11 million, and NPBT up similarly on a 4 per cent reduction in gross revenue and other income.

“The slight reduction in NPAT on the PCP being due to a tax benefit in that period, against a tax expense for this period.”

Operating cashflow was up 72 per cent for the half to $1.80 million, with cash at hand $5.23 million on 31 December, despite WT Financial having settled its acquisition of Millennium3 with cash just prior to the end of the period.

“We are delighted with the results and expect continued growth in profitability as we integrate our Millennium3 acquisition into the broader group and start to explore new revenue opportunities,” said Mr Cullen.

In the announcement, the firm also attributed its solid results to a shift in its focus to the advice network, adding that it is on track for “organic growth”.

“The completion of its various acquisitions over the past three years has represented the conclusion of a very deliberate strategy by WTL to shift from its previous direct-to-consumer (or B2C) focus to an advice network (or B2B) focus to capitalise on industry disruption,” it said.

“The scale and depth of skills and assets created through these acquisitions has seen WTL emerge as an industry leader with an offering for modernised advice practices that the directors consider is second to none.

“Accordingly, the group is well positioned to achieve organic growth through aiding in the growth of existing practices, product and service innovation, and in turn the recruitment of more leading advice practices.”

While WT Financial did not declare any dividend, it said the group retains the policy to pay dividends “at least once a year subject to profitability and outlook”.