Fiducian Group Limited (ASX:FID) Managing Director, Indy Singh discusses 1H17 results, growth drivers and outlook.
I started Fiducian Group Limited (ASX:FID) in 1996, it’s grown quite well. The size of the business now is that we have $5.1 billion under administration, management and advice. We have five operating entities, funds management, financial planning, advice business, administration business, software development and accounting. All of them are profitable, all of them are doing well and we have a capitalisation now of about $130 million.
For the half-year to December, funds under management, advice and administration grew to $5.1 billion, over 20 per cent. The underlying net profit after tax, also for the half-year grew by 22 per cent. And the earnings per share growth were also about 23 per cent, for the half-year. So it was quite pleasing. The main drivers for the results were increasing funds under management; they grew quite a bit, up to $1.8 billion. Funds under administration along with the acquisitions we made went up to almost $1.9 billion. And funds under administration went up to about $1.3 billion. So all three increased and as we charge at each level, the profits also rose.
Our strategy has been to grow the business at all fronts. Now the important part for us is to grow funds under advice and we’ve increased the number of financial planners. We’ve increased the inflows, the inflows are pretty strong at over $200 million last year. That money is also then invested into our platform. So our platform administers clients’ monies and that has grown to about $1.25 billion.
A lot of that money, if it’s found right by the financial planners and the clients, is invested in the Fiducian funds, which have had some spectacular performance. And Fiducian funds have grown up to be almost $1.8 billion. Now at each level and each main operating entity, we receive fees and that has all added up to increase the revenue, and the underlying net profit after tax.
I think acquisitions are important for us, because we have had a lot of organic growth. But we’re also now trying to expand by acquiring smaller to mid size financial planning businesses that we can digest properly, that we can benefit the investors, and also the ones that can fit our culture. And so that’s definitely one of the important things for us, going forward is acquisition of financial planning businesses.
The priority for the longer term is obviously dependent on the next six months too. But it is to grow the business to be profitable, to deliver good dividends to our shareholders and growing dividends, and to remain profitable. We’re not in the business of growing for the sake of growing. If we can’t add value and deliver returns and earnings for our shareholders, we don’t see any value in the business. So that’s going to be the big strategy, increase profits, expand the business, grow the business and deliver returns and profits for our shareholders.