Sequoia Financial Group Limited (ASX:SEQ) Managing Director Garry Crole discusses financial indicators, achievements, divisional results and growth trajectory.
I would really like to firstly say that we're very pleased with the financial results, and we're pleased with the market reaction to the financial results so far. In saying that, I would just like to thank a few people in regards to that. Firstly, I'd like to thank our staff. I think, during periods like COVID and lockdowns and all sorts of things, it's a very difficult time for everybody. My haircut is an example of that. That's a COVID haircut. So, I'd like to thank all the staff. We have 109 staff within the Sequoia Financial Group, and their dedication to the performance over the last 12 months has been outstanding, and I'd like to say thank you for that.
We also have 400 advisors offering financial advice to the community, whether they're stock brokers or financial planners, risk advisors, etc. And again, they've been doing it very tough as well in an environment that's difficult to go and see people face to face, but have done an outstanding job during a period of time where the industry is facing a lot of challenges in respect to the cost of the provision of advice and so on. And I'd like to thank them, and I'd also like to thank our 695 shareholders for supporting us through the last 12 months. So, thank you for that.
I'll move to the presentation and the numbers. As Cozette said, I'm looking for this to be as much interaction as possible. If you've got a question you'd like to ask urgent, like right at the time, please say urgent question, and we might break and I'll answer that question urgently, but preferably I'll answer all the questions at the end. Cozette will take the questions and we'll go through them and we'll look to get answers to all of them.
Also, on line today I have our CFO, Lizzie Tan, who's been a sensation for the business over the last few years. We are reporting earlier than normal. Our accounts are very efficient. One of the things we said 12 months ago was that we would like to get the business operating more effectively and returning a minimum of 15 per cent on equity in every business unit. I'm pleased to say we've done that, and a lot of that thanks goes to the 109 staff and particularly Lizzie. So, thank you.
A disclaimer. Obviously I'm not providing any personal advice here. I may share my personal opinions, but I'm not taking into account anyone's personal circumstances. So, anything I say today is general in nature, factual in nature, and is not personal advice, so please don't take it that way. You need to take your own circumstances in place. And I will give some advice -- the best investment anyone can make is to go and see a financial planner, sit down, and they will look at your personal situation and give you some advice.
Key financial indicators that I would like to talk about today, of importance. I think most people would have seen the results already, so I'm not going to go through them in too great details. I'll talk about it on a division by division basis, look towards the future, but some of the numbers are quite outstanding in respect to where we have come from, so I just would like to highlight those.
The revenue is up 37 per cent to $116 million. The budget we set at the start of the year was between 100 and 110 million, so very pleasing that we got to 116. We expect revenue to continue to increase by at least 15 per cent organically. We have set an internal budget without any acquisitions for the next 12 months to see our revenue grow by at least 15 per cent next year. That will flow down to EBITDA and operating net profit after tax, etc -- hopefully, we would expect, on a more than 15 per cent basis. As our revenue is growing, we are getting the benefits of scale. And as you can see by the EBITDA operating profit result and net profit after tax result, 30 per cent increase in revenue has allowed us to get 138 per cent increase in EBITDA and 187 per cent increase in net profit after tax. So, scale is critical, and we are looking to build scale organically by more than 15 per cent.
Over the last 12 months, talking about non-organic growth, we've had eight acquisitions. Most of them are customer books. One was a business acquisition, being the PantherCorp business, but the other seven businesses that we acquired, mostly with cash, were bolt-on acquisitions to existing businesses. So, in our budget now forecast, we're not allowing for any further growth when I'm talking about the 15 per cent, but you can be assured we will be using our cash to make further acquisitions in a number of business units over the next 12 months.
The business overview, I'd just like to talk about what we do. I think most of the shareholders and most people on the line would already have a very good understanding of what we do, but I want to just clarify exactly what it is we do because there has been some confusion in the market that we're just a dealer group, or we're just a broking firm, or we're just a clearing business. We are not that. What we are is a provider of services to the financial services industry. So, we do provide services to financial planners. We do provide services to stock brokers. We do provide services to accountancy firms. And that is what we are. So, what we're looking to do is think about distribution, and as advisors, accountants, and other third party AFSL holders, think what we can do to reduce the cost of providing advice to Australians.
Only 11 per cent of Australians are getting financial advice from a financial advisor at present. 40 per cent believe that they would like to get advice in the next 12 month, so that the growth of $1 trillion of funds under advice is being under-utilised, because people are either not sure how to engage with a financial planner, have been uncertain about how to engage with a broker or a financial planner and so on. But there's clearly an increase in demand for the type of services that our advisors and our clients provide, and that is positive.
At the same time, we're seeing less advisors available to a marketplace that's looking to grow. The number of advisors has fallen from 30,000 in the industry, and is likely to fall to about 13,000 by 2024. That is a real problem. For a group of our size and our growth ambitions, that's very, very positive for the business, but for the Australian community, it's a real issue, and government and legislature is going to have to be mindful of what they can do to help advisors reduce their cost of advice and hopefully red tape, and all the compliance and education requirements being put on the industry can find a point where the cost-benefit analysis for an advisor and a business person is fair value, and that can flow down to the community.
All four businesses, as I said, are really providing one service, and that is providing a service to the advisors.
In respect to our achievements over the last 12 months, we made some statements about what we would like to do. And one of the key things is, was we talked about a 15 per cent return on equity as an absolute minimum target for any business operation that we had. We have 20 separate businesses operating through four divisions, and every single business is achieving now a minimum of 15 per cent operating return on our equity. As a group, we achieved 28 per cent operating return on our equity across the board as an average. But we maintain as an absolute minimum during any growth period that we want to have a minimum operating return of 15 per cent on any single entity. Some will drop obviously towards 15 per cent when in growth phase, but prime function is to not make acquisitions or not to grow businesses unless we're sure that they're going to provide that sort of minimum return. And we will be looking to make some strategic acquisitions across the divisions that haven't quite reached the scale level that we believe.
So, in the Professional Services division and in the Direct division, over the next 12 to 24 months, we intend to grow those dramatically, as we have grown the Equity Markets division and the Wealth market division over the last 12, 18 months. We are in discussions with a number of parties about potential acquisitions, and we've identified a number of businesses that we would like to acquire. And hopefully in the next 12 months you will see us achieve the same sort of results that we achieved this year in respect to both organic and acquisitional growth.
In looking at those numbers, revenue from 2020 has gone from 46 million to 55 million. I'll put my glasses on because I'm as blind as a bat. So, we've gone from 40 million to 55.3 million. And in the Wealth division our EBITDA line looks low as a percentage, and that is because a lot of the revenue that's collected in Wealth is the advisor's income. Our net margin after paying away the cost of sales, advisor income, is actually around 30 per cent. So, we actually do have a high-return business in respect to Wealth. However, when you just look at the pure numbers, because cost of sales is such a high number, then the majority of the income an advisor generates goes directly back to them. That is why the numbers look a little bit soft, and, you know, 2021, it was 9 per cent. The reality is the real number, after the cost of sales, is more like 30 per cent, and it's the sort of sustainable business that you would like to be running.
Equity Markets division is the same. So, we do clearing and executing in the market. So, a broker would add his brokerage on to the ticket, and we refund their brokerage net of our cost. So, the margins look very skinny, but in reality, the margins are more like 30 per cent on the operating businesses. The Direct and Professional Services margins don't have that, and that's why their margins look more reasonable, around the 25 to 30 per cent level.
Clearly, we want to grow, as I said before, 15 per cent across the board. Direct and Professional Services will be looking to increase by a significant higher number than that of a much lower base, and Wealth and Equity Markets will be looking to achieve at least 15 per cent as well.
The growth is very positive, as our share price and performance reflects. On the share price, what is pleasing from my perspective is, you know, the share price has gone from sort of 20 cents to 65, 70 cents over 12 months, but if you look at the top 100 shareholders, around 90 of the top 100 shareholders have been there for the whole 12 months, and continue to be shareholders in the group. So, that's really satisfying. This journey I talked about, the tortoise and the hare, last time I presented, you know, we have looked a little bit like a hare in respect to the numbers, you know, growing really quickly, but we're really not about that. We're looking to build a very sustainable business over a very long time, and the fact that 90 per cent of our shareholders had a 200 or 300 per cent return on their capital over the last 12 months and remain a part of the story is really rewarding, because we're not about having a $100 million revenue business and a $10 million EBITDA business in three to five years. We're talking about having a $400 million revenue business with the sort of EBIT, you know, $30 million, that we projected 12 months ago. That continues to be our target. It's something that we want to slowly and gradually have the type of chart that we're showing today, you know, good, steady growth over long periods of time.
And one of the points there is that we have a very low dividend payout ratio. And the reason for that is because we want to re-invest the cash that we have back into the acquisitional growth strategy. Our share price when it was very low was not a very good currency to be able to use to get scale. Our currency now is better, but still I would prefer to be using as much cash as I possibly can to make acquisitions at three to four times EBIT rather than using our shares, which are trading at around six to seven times EBITDA, or six to seven times the cash we generate, as our currency, because I believe that that currency continues to be undervalued at six or seven times our operating cash profit. We will use it selectively. If we're looking to buy a business that is more like a merger, and the principals of that business want to be part of our long-term journey, we will use our scrip as currency, but at the moment smaller businesses are looking to exit, and we will be using cash as our funding mechanism for those particular ones.
Operating margin, as I touched on before, is a bit distorted, because our cost of sales makes it look low, but our operating margin on revenue has increased, you know, sixfold over three years, which is great. However, you know, it's a little bit distorted because of the cost of sales revenue, but that is how it is, and we would like to maintain at least 10 per cent of our growing revenue as our operating margin.
And a lot of companies are talking about EBITDA, and, you know, the analysts not so confident in respect to applying a multiple of EBITDA as evaluation, because there's all sorts of things that sit in there. In our case, our EBITDA is primarily our operating cash flow. There's no write-offs or hidden things below the line. Our operating EBITDA is almost our operating cash flow. So I think applying a valuation on that is reasonable.
The momentum half year to half year is a very important metric for us. We do have some seasonality in our revenue where the second half tends to be stronger than the first half historically. That is likely to reduce a little bit as scale increases. In our budget and our management forecast, we've estimated 45 per cent of our budget and forecast in the first half, and 55 per cent in the second half, from a budgeting and forecasting point of view. But, as you can see, the numbers of operating cashflow or operating EBITDA, which is, as I touched on before, is very close to cashflow, continues to be very consistent in its growth. The second half of this year has been very, very strong. There's a couple of reasons for that. One is the acquisitions that we made over the last 12 months have really started to be integrated extremely well, and we're now starting to get all of the synergies that we hoped that we might get from some of those acquisitions. And that gives us great confidence looking forward for the next 12 months and 24 months. And some of the acquisitions that we didn't actually get the full half year benefit even in this period. So, we are feeling very confident in respect to the future, but I would like to under-promise and over-deliver. So, I'm talking about 15 per cent revenue growth as a forecast. I would like to think that you can bank that, and I'd like to think that the numbers that generate from that show an improved margin across the board.
The four divisions, I might just touch on them quickly. I don't want to spend all day just talking. I'd like to take questions and answer questions about the results more than me just doing a slideshow. But the wealth management arm consists of six businesses. So, it's basically six areas of financial services where we provide a licence for advisors. So, you've got the InterPrac financial planning business, which is the largest licensed by number. It provides holistic financial planning advice in a business-to-business basis. We have the Libertas financial planning business, which is very similar in respect to its authorised reps and providing financial planning advice from their own premises as a consultant operating under our licence. And then we have the businesses that we own that operate from within. So, we have the Sequoia corporate business, which is a corporate arm that's providing corporate services, like a broking firm, IPOs, capital raises and so on, and using parts of our other network to distribute those deals. We also have the broking desk in Melbourne and Sydney. One of the acquisitions that has been very positive is the group of advisors that came across from Phillip Capital. Over the last 12 months, that’s been very, very good. All of them except one continues to be with us after 12 months. So the risk in buying groups of advisors is often that they leave. In this case they haven't left, and I think have been very happy with the transition across to us. We would like to grow that business. We would like to grow the number of brokers that we're offering our service to in house over the next 12 months. We'd like to have at least another five brokers in Melbourne and another five brokers in Sydney to join the Sequoia Wealth Management team. Our terms are very good. So, if you're a broker and you're thinking about joining the licence, we'd be very happy to talk to you.
And the other business we've got is a business that we announced just recently, is the family office business that has joined in the last one month. So the results, basically, didn't impact this financial year at all. But we've seen the July figures, and they've been very positive immediately. So, very excited about the family office opportunity and how that will link through to other financial advisors and brokers within our network.
Results are great. The results were above what we forecast in their budget, which is extremely pleasing. I'm really pleased with all of the staff and the advisors and everyone who has supported the group across that basis. We're at $55 million of revenue across those six businesses. Each one of the six businesses makes a similar contribution to the profit result, which is pleasing. And, as I said before, we have 20 businesses, and we're getting a profit contribution from every one of the 20. And that's allowing us to try and maintain our fees to the financial planners and the licensees that use us at a reasonable fee, because we want to help an advisor reduce the cost of their advice to the community. And the only way we can do that is to try and use our scale to reduce the cost of their operations. And that is very, very important. We have not put our fees up for several years, and we have no intention of putting our fees up to advisors on the splits that we charge. We would like to use their scale if we can use to reduce their costs and to offer them other services across the business so that they can continue to reduce the cost of advice out to the community that they provide.
Outlook, nothing has changed there. Our goal is to provide services to 1000 advisors by 2025. We think that's going to be 8 per cent of the overall market. We're at 400 now. We expect to grow. We are acquisition-hungry. So, there's a number of businesses out there that we would love to talk to that have got groups of 50 or 100 advisors that it's very difficult to make a profit and provide the type of services that you need to provide in a cost-effective manner. We would love to talk to those parties, and rather than buy and sell, we would like to buy and merge those parties, give them equity in our business and grow long term to the point where we've got 1000 advisors and we're providing the premium service to the market. And the advisors themselves, being the most important component, are getting a fair cost and a high service, and they can go out and provide their service to their clients in the most cost-effective manner to the end client, which is where it really is important.
Equity Markets grew. We bought the Morrison Securities business a couple of years ago. I think it was well known to the shareholder base that, when we bought it, we had an intention to build a premium service and invest heavily in people, technology and systems. The staff that we have in the Morrisons business and the Sequoia Special Investment business are absolute premium and have been very determined in growing this business. Our turnover in respect to contract note turnover is up more than 300 per cent in two years. Unlike the direct trader or the day trader or the online business, the Morrison business is about providing services to financial advice groups and high-net-worth investors and fund managers. Our average ticket size is more than $100,000. So it's not the self-wealth-type business. The Morrison clearing business is more about providing a service to a financial planning organisation or another AFSL holder, or an advice provider, fund managers, platforms, etc. And we're looking to continue the growth in that particular area to the top end of the market, who are doing higher turnover contract notes, and they're looking to reduce their costs. And, more importantly, they're looking to get the highest level of service in respect to their execution and clearing and risk in options and equity trading. And our numbers reflect that we're doing a good job. We're winning business on a regular basis. We're not losing clients. Stock on HIN has increased from 1.5 billion to 4 billion in the last 12 months. And contract notes, despite the March highs, where turn over in the market was really spiked up, our numbers have been very consistent from March onwards, and we're 200 per cent over the last 12 months, and contract note numbers continue to rise because we're not caught up in that volume day trading market.
Sequoia Direct, it's been a business that we've had to address in respect to achieving the 15 per cent return on equity that we set as a minimum target. The numbers that we talk about here, this is one area of our business that we're going to put a lot of emphasis on growing over the next few years. So, in the presentation to market, our revenue is currently at $2.2 million in this area. We would like this to be $10 million in two years. So, this is an area we are going to put a lot of time in. We have the platforms. So, the Financial News Network platform and the Yield Report platform and the Sequoia Direct platform are very, very good. We've built the back office, and we've built the infrastructure to be able to now go out and market this service to more and more small companies in respect to the Financial News Network offering. We want to talk to every fund manager in the marketplace and have them interviewed about what they're looking to provide to their end clients. So, when a financial planner talks about making a recommendation on a particular fund manager, they can link to their SOA statement of advice they're providing their end consumer, an interview with that particular fund manager that they've selected as their fund manager, or part of a portfolio. So, most financial planners when recommending a portfolio of managed funds might just have six or eight different managers that they select, so they might have a specialist in cash, they might have a specialist in fixed interest, balanced high growth, direct shares, etc. We would like to be interviewing as many of those as we possibly can on our Financial News Network website, so the financial planner can have a resource to link to their SOA and give the community at large a much better understanding of the investment managers that are being recommended by a financial planner. And that's not just a Sequoia financial planner, that's a financial planner for anyone in the marketplace. We really want to be a service provider to listed companies and a service provider to fund managers that have got product that they are unable to necessarily get someone watching or seeing or hearing about their strategy. And that's something that we're looking to really grow and progress over the next 12 months.
The Professional Services area is the last of the four areas. I'm up about 11 o'clock already, so I wanted to spend half an hour or 15 minutes on time. This is the documents business and the self-managed super fund administration business and our general insurance broking business. We are acquisition-hungry. We bought the PantherCorp business from Easton, and that business has done very, very well under our administration. The team are very pleased. We are integrating our technology into the PantherCorp business so that the document business can be quicker, faster, more accurate, and give the end user, the accountant, the financial planner a very seamless process to set up new companies, trusts and super funds for their client base. We are expecting really strong growth there. Our self-managed super fund administration business that financial planners, accountants, and high-net-worth investors select to outsource to, we have a high-growth strategy there. We are looking to make acquisitions to grow our numbers and improve our scale. And the same on the general insurance broking business. We are very keen to acquire general insurance broking businesses, very similar to what Steadfast and PSC and other groups in the sector have done. It's a really great business and makes a lot of sense for us to be in that particular area.
In operating environment, I think I've covered a lot of this. Advisor numbers I think are going down to about 13,000. The demand for advice is increasing, aging population, COVID, withdrawals from the banks from advice, accountants no longer being able to give off-the-cuff advice without a licence is driving consumers towards financial advisors. The cost of advice is increasing. Our scale, hopefully, is going to allow more advisors to be able to reduce their costs of advice. Probably the greatest thing that happened out of the Royal Commission, and it's what our business model is all about, is the separation of licensed services from the provision of product distribution continues. So the banks, AMP, the big insurers are separating from all of that, which is great. And now what's happening is people are going to a financial advisor for advice and strategy. They're not going in and selling product. Selling product is not what a financial planner does. They do provide advice and strategy, and the product comes last.
The number of licensees with sufficient scale is reducing. Really you have to have 50+ advisors to have any sort of efficiencies, and those sorts of groups really should be talking to groups like us and Centrepoint and Easton and those emerging groups that do have the scale and can provide the type of synergies and wide range of services that you need to be able to provide to help the advisor.
One of the things that's happened from the banks and the AMPs is the separation of advice and products is actually reducing the cost of the product because many of those companies are having to improve their product offering so an advisor selects them off the shelf. In AMP's case, which is probably one of the biggest challenges of the marketplace, where product and advice was together, the AMP product is actually from our perspective improved significantly over the last 12 or 18 months, and we're seeing that in many of the previously aligned product providers, their new products are much more cost-effective and more likely for the IFA market to support them, which I think is a really good end result for the consumer.
Our future growth initiatives, I've touched on many of them. We continue to want to be 1,000 advisors. We would like to continue to acquire customer books. We would like to continue to look at growing our Professional Services revenue towards 15 million within the next three years, our Direct division to 10 million in the next two years. We'd like to continue to win market share in the Morrison business. And the shorter-term focus is to really build our general insurance broking business as well over the next three years.
Thank you for listing. I would really like to take as many questions as I can. And I've got a few questions here from Cozette. Can I comment on derivatives exposure having increased significantly in the last 12 months? So, we don't have any derivatives exposure at all. So, we provide two particular products to the market in respect to derivatives. So, we are a clearing broker for the options market, but we don't take any positions whatsoever. It's all cash up front, managed, etc. In respect to our specialist securities investment business, where we provide a number of products into the market, it's net, net. We outsource to the International Bank. One-on-one, Sequoia has no direct exposure whatsoever to the market, so hopefully that answered that. We're not in the business of taking risks with capital on behalf of shareholders. We're in the business of providing services to the market, and clearing options is part of that, but we don't take any risk in-house, we don't ride options. We're not a market maker. We're just an executor and a clearer.
Second half EBITDA of 7.5 million, is it reasonable to assume this figure can be annualised for full year '22 growth? Good question. I want to be the tortoise rather than the hare in respect to answering that, so I'm not asking anyone what to assume here. But what I would like to say is that we would like to increase by 15 per cent on the revenue front over the next 12 months, and that will flow through to EBITDA in the first half and the second half. I think until we see what our first half result is, it's difficult to answer that question without being too bullish. I don't want to be bullish. I'm happy to commit to 15 per cent growth on the revenue line and see what falls out at the bottom. Our budget is 13.5, 14 million full year, but we would like to beat the budget. Hopefully that answers that question.
Where do we see the dividend topping out as profit, and when do you see yourself getting there? The dividend at the moment is we're paying $1.3 million of dividend against a $5.5 million net profit after tax, so about 28 per cent of NPAT, or about 15 per cent of cashflow. At the moment, we particularly would like to think that we can use our excess cash to generate more profit than a dividend percentage. At the moment, the 28 per cent payout ratio is not going to be reduced. We will tick up towards the top end of the 60 per cent range that we talked about over three or four years, but I would think that, in the next 12 months, you could assume that our dividend would be no more than 35 per cent of NPAT, because we really do want to invest our cash in acquisitions that are more earnings per share accretive than paying a dividend, at this stage of our growth. We really are a growth company. Until we see the revenue topping out at five to 10 per cent forecast, now we're looking at 15 per cent plus, we would like to reinvest as much of the cashflow we generate back into the business to get higher earnings per share.
With regards to serving the financial sector, have you considered registry service SAS provider ASX:RD1? Interesting question. We've looked at RD1. We were a shareholder at one stage in RD1. We do use RD1 directory services. We're a client of theirs. I think that we're one of their bigger clients. We think their business is a good business. But they're not generating a profit. We want to make acquisitions that are earning per share accretive to our business, and we're quite comfortable at this stage to be a client of theirs and watch them grow. I think they've got some good opportunities, but it's not a business that we're likely to want to buy in the short term.
Do you see COVID impacting the business at all moving forward? No, I think COVID… Certainly, it's not from a negative point of view. I think COVID is likely to, from a positive point of view, see more Australians need to address their financial affairs and understand the risks associated with their income and their lifestyle and their future retirement. I think lockdown sees people spending less of their discretionary income and gives them the ability to save more and actually to address some of the things that they might not necessarily have thought about when we were open and free, and all those sorts of things. So I think COVID is going to be a challenge for a lot of businesses and a lot of businesses suffering awfully, but from our perspective, I think one of the things it has done is make people more aware of their own personal situations and actually start to have a think about their wealth protection and their wealth accumulation. And financial planners, the best investment you can make is to see a financial planner. And I think more and more Australians, 11 per cent are currently engaging with a financial planner, 40 per cent are quoted that they would expect to engage with a financial planner in the next 12 months. Part of that I think is as a result of COVID. More of that in my opinion is a result of the baby boomer getting closer and closer to retirement and recognising that they'd start doing something in respect to accumulation of wealth. And also a lot of wealth is being seen in the property market where families are seeing a wealth changeover, and they really do need advice in that respect.
We've got some more questions coming across. How is the advisor group tracking in the new FASEA requirements? Very good. We have a high percentage of our advisors that have completed the FASEA exams. Lockdown as has caused a few of the ones that were doing the exams in September to defer. The online exam of FASEA is probably not something that the elder advisors would prefer to do. They prefer to go into an environment where they can sit in the exam room and do the exam, but we've got the majority of our advisors, come December 31, will have completed FASEA. And that's a positive for us. The industry has reacted very positively to FASEA. Spent a lot of time completing the exams. Pass rates are beginning to improve higher than they were. But FASEA has been positive for us. It improves the confidence in the marketplace for the community that hasn't engaged with a financial planner. The 11 per cent of the population that's working… That access to a financial planner is a terribly low number. I think the increased education requirements of FASEA has been very positive for that. And I think now we're in a good position because most of our advisors have passed that.
Are regulatory changes such as DDO likely to have a material cost impact? That will have some cost impact. I was talking to my compliance manager this morning before. We're going to have to put on another full-time dedicated staff person just to support the DDO reporting requirements. So, one of the challenges for the industry is the cost of regulation is pushing up the cost of advice. Yes, we will have an additional cost with DDO. That's positive. And I think what will happen is that will actually accelerate the consolidation of dealer groups rather than be a challenge for a group like us. Whilst we will have an additional head count just to be a full-time DDO reporter, the smaller groups don't have the capacity to employ dedicated parties for compliance, dedicated parties for education, dedicated parties for DDO, dedicated parties for research. But when you have 400 advisors that you're supporting, you can do so. When you have 20 or 50 advisors, it's almost impossible, and that's what's driving more and more consolidation and will drive more and more of it in the future.
Does the 15 per cent top-line growth forecast rely on acquisitions or purely organic? That is purely organic. So, each acquisition that we make will increase that. So, the budget's basically… The 15 per cent is what we've budgeted for with the existing team. We did include within the forecast for the family office, so family office was not in the 2021 results, but we have included those net forecasts. But if we make acquisitions, the 15 per cent growth number will be exceeded, and we will not be making acquisitions unless they're earnings per share accretive, and we're hoping to pay three to four times EBITDA as our purchase price and using cash as much as we possibly can to do that.
Can I comment on the current size of the acquisitions being considered? Nothing is off the table. Obviously, our market cap is $90 million, so it's very difficult to make an acquisition of a huge size without dilution. There is a number of companies of the size of $40, $50 million market cap that are listed that I would love to talk to about merging and doing so, but we're trading at six to seven times operating cash. Many of those are trading at 10 to 12 times operating cash, or actually not even cashflow positive. So, because of that are very unlikely to be offering paper. However, if we can potentially look at some of those and use cash, we may consider it. But most of the acquisition sizes that we'll be looking at will be businesses that are generating, say, $500,000 to $1 million of EBITDA, and we're paying two, three, four times EBITDA, $2, $3, $4 million cash for them, and continue to build our cash flow and just keep repeating that process, so that hopefully we have a payback period of one or two years, and we continue to increase our cash so that we can get more and more acquisitions of greater scale without having to issue too many more shares.
Can I comment on the percentage uplift in new clients in Morrisons? I'm sorry, I can't. I don't know the answer to that one specifically. I know the turnover, the numbers is up 200 per cent. My understanding is that the stock on HIN has gone from 1.5 billion to 4 billion. The number of clients, I don't know the exact answer to, but it's more than 100 per cent. The actual number, I'm not sure, but we're certainly seeing new client accounts opened every day in large numbers and more AFSL holders, and more fund managers, and more platform. One of the platforms is actually looking to engage with us right at the moment as a new client. So, there's a lot of growth coming through in that area.
Contract notes growth for Morrison business second half '21 to second half '20 consistent with the whole year period. So, the 200 per cent continues. It wasn't high growth in the first half and then not so much growth in the second half. The line is quite straight, and we're growing on a straight-line basis.
How will the potential rise of interest rate from US inflation affect the financial planning, wealth management market in Australia? That's a good question. From our perspective, we're product-agnostic, so I think the answer to that question is the more uncertainty, the more volatility, the more change of legislation, the more everything. People need to engage with a financial planner. As I said in our disclaimer, personal advice is very individual. Everyone's situation is different. Everyone's risk profile is different. Some of us might be open to investing in all equities, others are still happy to invest in bonds. If the interest rate and US inflation does affect markets, I think more and more people are more likely to need the use of a financial planner. I think that plays out when you look at the demand when the market corrected through March in COVID and the markets lifted dramatically, there was a lot of self-directed investors. Cryptocurrency drives a lot of self-directed investors, interest rate changesdrives a lot of self-directed investors. And long term it shows that self-directed investors and those with a lack of education in that particular area will lose their money. They don't understand markets and they make decisions based on the wrong parameters. Financial planning is about a tortoise, not the hare. And it's about sitting and thinking about strategy and volatility of the US market, and the changing of inflation really needs long-term thinking and time in the market rather than trying to time the market. And I think a financial planner is best served to meet that future need, if it actually eventuates.
I'll take the last question, is how sustainable a cycle do you consider Morrison's earnings to be? I think that they're not cyclic at all. I think what we're seeing is that we're seeing more and more advice providers looking to provide direct equity advice to their clients, and we're in the market of providing a service to those advice providers that is competitive in price, and, most importantly, effective in the way we deliver our service. You know, high touch, high execution, DTR support, stock borrowing support, cash support, all those sorts of things. And I think the Morrison businesses is far from cyclical because we're not in a day traders low high volatility market, we're in the advice market and serving the advisors. As I said, portfolios are long-term plans.
I would like to thank everyone for all the questions. We've gone a good session. Thank you for your support. My email and our CFO's email is online. Feel free to email me any further questions or any finance questions to Lizzie. Thank you again for your support, and hopefully we can continue to deliver long term share appreciation, and over time increase those dividends. So thank you very much for your time today.Ends