EQT Holdings (ASX:EQT) talks global expansion and FY17 results


by Jessica Amir

EQT Holdings Limited (ASX:EQT) Managing Director, Mick J O'Brien, provides an update on the company's global strategy, acquisitions and 1H18 outlook.

Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me now from EQT Holdings (ASX:EQT) is Managing Director, Mick O’Brien. Hi Mick and welcome.

Mick O’Brien: Hello Jess, how are you?

Jessica Amir: First up, for those new to the company. Can you just give us an introduction?

Mick O’Brien: EQT Holdings is a specialist trustee company, that’s all we do. We’ve been in existence since 1888, so coming up to our 130th anniversary next year, which is very exciting. The company reorganised itself about two years ago. It put EQT Holdings in place as the parent company and dropped its subsidiary operating companies, down one level. So that’s the change from EQT, Equity Trustees to EQT Holdings Limited. Market cap is about $400 million. Our headquarters are in Melbourne and we operate all around Australia, and just moved offshore as well.

Jessica Amir: And to FY17 results. What were some of the highlights Mick?

Mick O’Brien: We had an incredible growth in our corporate trustees services business. Our profit before tax was up about 16 per cent on the previous year. So that was great and earnings per share was up 15 per cent. The Board saw fit to increase the dividend from 68 cents up to 71 cents, so rewarding shareholders. And we undertook a number of acquisitions, which are really in our core space. So I think everything was online to our strategies throughout the course of the year.

Jessica Amir: Now to your services in more detail, just tell us about your offerings?

Mick O’Brien: We’re a trustee company, so for private clients we offer traditional or core trustee services. So that means estate planning, estate management, managing trusts. We have a very very big philanthropic business, both testamentary philanthropy as well as living donors. We also provide financial planning advice to our clients and also funds management services. We also have some non-core trustee services, where we provide a trustee service to indigenous communities.

We also provide those services to compensatory trust clients, that’s our private client business.

We also in superannuation, provide trustee services to superannuation funds and we do successive transfers for funds as well.

And in our corporate trustee services business, we provide responsible entity services, which are trustee services to funds managers. And we also provide trustee services to other corporates, who might be doing debt issues or securitisations, or the like.

Jessica Amir: Now to your acquisitions and strategic alliances. Can you just tell us about a UK fund that you just pounced on?

Mick O’Brien: Just recently we announced that we acquired a 60 per cent stake in Treasury Capital Limited. And they’re a company that provides trustee, or responsible entity type services into the United Kingdom market, as well as pass porting to the Irish market. These are important markets, because funds managers tend to operate their funds in certain centres around the world. And the UnitedKingdom and Ireland are two of those centres. So it’s a start up business, we’re very excited. We’re going to capitalise on our client base, which is half offshore funds managers, to be able to provide them the same type of service in another jurisdiction.

Jessica Amir: What other alliances and acquisitions have you got in your hot little hands?

Mick O’Brien: We had a very busy end to the year. So through October we announced the Treasury Capital acquisition, but also that we’d acquired OneVue’s Responsible Entity business. So that’s a business with $2.3 billion of funds under supervision and 26 different funds, and that really is core business to us. And it further strengthens our leading position in providing those services in Australia.

We also announced a week after that, that we’d entered into an alliance with Aon to be the trustee of their Superannuation Master Trust, which is a $3.2 billion trust. As well as agreeing that we would try and build and develop our business together with them, in the superannuation area. So we’re very excited by all three of those deals. They’re absolutely in our core space of being a trustee and they really strengthen our position, in each part of the market.

Jessica Amir: Can you tell us about your strategy and perhaps is there an overseas large body that you’re really modelling the business off?

Mick O’Brien: Our strategy’s fairly clear right, that we’re seeking to be the leading specialist trustee in Australia, and we’re now expanding that offshore. So what does that mean? Well it means we’ve got all of our capital, all of our intellect, all our efforts into being a trustee right. And we really think that resonates with our partners and with our clients. There’re no obvious candidates offshore of global trustee companies, because they tend to be in the various colonies that the UK settled and it hasn’t really globalised. But that’s really I guess, the background of why we’re trying to build our corporate trustee services offshore. We think we can actually expand offshore. We’ll keep our private client business here in Australia and so we’re very focused on what our specialty is.

Jessica Amir: Just wrapping up Mick. What’s your guidance for FY18?

Mick O’Brien: We had really strong momentum in the last quarter with these three deals that we’ve announced. And the trading results through the quarter have been very encouraging as well. So we feel quite confident about the results, going into FY18.

Jessica Amir: Mick O’Brien, thank you so much, it’s been an absolute pleasure.

Mick O’Brien: My pleasure.