Sequoia Financial Group Limited (ASX:SEQ) Managing Director and CEO, Scott Beeton talks about the company's FY18 results, recent capital raising and the growing market for its services from advisers, planners and self-directed investors.
Jessica Amir: Welcome to the Finance News Network, I'm Jessica Amir. Today I'm with Sequoia Financial Group Limited (ASX:SEQ) CEO and Managing Director Scott Beeton.
Hi Scott and welcome back.
Scott Beeton: Thanks Jessica, thanks for having me.
So for those who aren't familiar, you're an integrated financial services firm with over AUD$3 billion in funds under advice. Just give us a quick introduction.
Scott Beeton: Thanks Jessica, you're right. Sequoia Financial Group Limited (ASX:SEQ) is an integrated financial service firm. We've divided our business into four main divisions and they centre around the accountant, the financial planner, stock broker and the mortgage broker. Under those four divisions, our main emphasis at the moment is mainly financial planning. Finding financing solutions to over 250 financial planners. And also to the stock broking sector, where we provide stock broking services to many financial planners, accountants, and also to the self-directed investor.
Jessica Amir: Thanks Scott. Now to your FY18 results well done. But just tell us some of the highlights.
Scott Beeton: FY18 was a fantastic year for all of Sequoia Financial Group Limited (ASX:SEQ). We had record revenue and record profitability across all our divisions in the group. Our revenue was in excess of AUD$76 million. Our Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) was AUD$4.3 million and our Net Profit After Tax (NPAT) was AUD$2.4 million for the year.
Jessica Amir: And what drove those results, Scott?
Scott Beeton: Well FY18, the good news for Sequoia Financial Group Limited is most of our growth came from organic growth. And that was across every division with record revenue and underlining profitability in each division. But also we have a strategy of acquisition and in the year we were successful in acquiring Morrison Securities Pty Ltd and InterpracGroup Pty Ltd.
Jessica Amir: Thanks Scott. Now let's talk about your capital raise. You've raised AUD$5 million. Tell us who got behind the raise and what you're planning to use the funds for.
Scott Beeton: For the AUD$5 million, we've actually required that for our reg cap (regulatory capital) requirements under our stock broking division. So, I said earlier we acquired Morrison Securities Pty Ltd. Throughout the year we’ve been rebuilding that business for our core activities. Providing stock broking services to financial planners and other stock brokers in the industry.
So that AUD$5 million was raised for ‘reg cap’ that we needed to put behind that business so we could actually integrate our other stock broking business, D2MX Pty Ltd into it. The good news is that's all completed. And we're expected to have savings of AUD$500,000 this coming financial year.
Jessica Amir: Wonderful. Now let's talk about your strategy Scott. Where you at?
Scott Beeton: FY18 we acquired a couple of businesses. The main one was Morrison Securities Pty Ltd and InterpracGroup Pty Ltd. We also purchased the extra shares we didn’t own in FNN, which is Finance News Network and also the InterpracGroup Pty Ltd general insurance business. We acquired another 10 per cent of that. We bought an accounting practice called My Own Super Fund Pty Ltd. So we did plenty of acquisitions in FY18 and where we are at right now is just building off those foundations and we've really focused on organic growth. But also bedding down those acquisitions. And also integrating them across all the business units together.
Jessica Amir: You've been very busy indeed. And lastly, is there anything that you wanted to add?
Scott Beeton: Well as you said, FY18 was a very big year for Sequoia Financial Group (ASX:SEQ). We've got great foundations now for moving forward with great underlying businesses. We're scaling them up in every way we can, and the amount of organic growth in the market place is just unbelievable for us, and we're looking forward to another great FY19 year.
Jessica Amir: Wonderful. Scott Beeton, thank you so much for your time.
Scott Beeton: Thanks Jessica, I appreciate it.