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Acquisition boosts bottom line for The Trust Company
The acquisition of Guardian Trust has seen The Trust Company increase its net profit after tax by 16 per cent to $6.4 million for the half year to 31 August 2011, according to chief executive John Atkin.
The purchase of the New Zealand-based Guardian Trust became effective on 1 March 2011, for a provisional price of $31.8 million.
“We’ve got very strong engagement from the Guardian staff, the management team is now fully integrated across the two sides of the Tasman, the clients have all stayed with us — it’s gone swimmingly,” said Atkin.
The increase in profits was enhanced by the six-month contribution from the Guardian Trust business, he added.
On the personal side of the business, The Trust Company offers estate planning and wealth management services, which Atkin said would be buoyed by the demographic shift in Australia towards an ageing population. The Trust Company was a 125-year-old business that had developed many multi-generational relationships with clients, and it was important to move the company’s systems away from a “linear transactional” approach to a “transgenerational relationship model,” he said.
“As the population ages - and that’s the one thing we can be sure of from the demographics - and you get more wealth coming out of accumulation stage into the post-retirement stage, it’s going to be a very important part of our business in the medium term,” he added.
Part of the company’s new approach would involve updating the company’s IT systems, which Atkin said were very old and contained legacy issues.
“What we’re doing is trying to move from being a ‘laggard’ 25 years behind the pace to being a ‘fast follower’. We’re going to go to a much more client-focused system and we’ll do that over the next two to three years. The spend will be in the order of $10 million,” Atkin said.
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