The loss of administration mandates has dragged on the bottom line of major provider Link which has acknowledged that fund administration revenue declined by three per cent in the first half.
Notwithstanding the losses, the company reported a significant increase in net profit after tax of 187 per cent to $186.8 million on the back of a 42 per cent increase in revenue, largely driven by the inclusion of Link Asset Services.
Commenting on the result, Link Group chairman, Michael Carapiet attributed it to the company’s ongoing international expansion which had served to diversify Link’s operations and revenue streams.
However, where fund administration was concerned, the company acknowledged that recurring revenue was impacted by previously disclosed client losses which it said had been offset somewhat by strong annual member growth from its five largest clients of approximately 4.8 per cent with overall annual member growth of 3.6 per cent.
“As a competitive provider of outsourced administration to the industry, Link Group believes that its platform allows clients to operate at the lowest end of the cost curve while benefiting from Link Group’s ability to disperse the cost of regulatory change,” it said.
The company said regulatory change, regulatory complexity and public debate in the superannuation sector would continue to provide both challenges and opportunities.
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