Equity Trustees reports 37% revenue growth

Equity Trustees has announced funds under management, administration, and supervision (FUMAS) of $183.5 billion for the second half of the financial year 2023.

This was 18 per cent higher than the prior corresponding period (pcp) and 14.6 per cent higher than 2H23, it said.

The results also showed that its discontinued operations in the UK/Ireland, announced in late 2023, accounted for some $5.4 billion of the total FUMAS. The exit is “well underway”, it said, and a substantive exit by 30 June 2024 has been targeted.

In an ASX announcement on Thursday, Equity Trustees said revenue was up 37 per cent on pcp to $83.9 million, “reflecting a six-month contribution from the Australian Executor Trustees (AET) acquisition and strong organic growth.”

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Underlying net profit stood up to $17.9 million and the board declared a fully franked interim dividend of 51¢ per share.

“Equity Trustees continues to grow, becoming a stronger and more diversified business following our acquisition of AET and several years of significant investment in technology and people,” said board chair Carol Schwartz.

Michael O’Brien, managing director, noted that the integration of AET, which was acquired from Insignia Financial subsidiary SFG Australia in 2022, is “proceeding well” and the new technology platforms are “providing better service and enhanced capability to drive growth”.

“Notwithstanding more volatile markets and less certain economic conditions, the outlook for CSTS is favourable, supported by government-mandated superannuation, ongoing fund innovation and increasing recognition of our outsourced independent trustee model,” O’Brien said.

The firm’s Trustee and Wealth Services (TWS) announced revenue of $49.5 million, a commendable 60.6 per cent up on pcp, which was credited to organic growth across core services and a full six-month contribution from the AET acquisition.

O’Brien described TWS as “going from strength to strength”.

“We expect traditional trustee services will continue to benefit from an ageing demographic and increasing levels of intergenerational wealth transfer,” he observed.

In the results, Equity Trustees noted a positive outlook driven by industry tailwinds and group transformation.

“Despite uncertain economic and global conditions, our businesses remain robust and ready to drive consistent organic growth,” O’Brien explained.

“Our operating cash flow generation is strong and our balance sheet remains conservative, with low gearing and good flexibility to take advantage of future opportunities.”