Reporting Season: IOOF profit beats broker estimates

By Trevor Hoey. Published at Aug 7, 2018, in Features

Name: IOOF Holdings Limited (ASX:IFL; OTC:IOOFY)

Market Capitalisation: $3.1 billion

Opening Price: $9.05

IOOF Holdings Ltd (ASX:IFL) has delivered an underlying net profit after tax of $191.4 million and declared a final fully franked dividend of 27 cents per share.

The profit was slightly ahead of the expectations of analysts at Bell Potter and Patersons, but the dividend was in line with consensus, bringing the full year dividend to 54 cents per share.

This implies a yield of 6 per cent relative to Monday’s closing price of $9.01.

Strong growth in funds under management

The impressive result was driven by robust Funds under Management, Administration and Advice (FUMA) growth.

FUMA increased to $125.9 billion, including net inflows of $5.8 billion, up 28 per cent on the year.

IOOF Managing Director, Christopher Kelaher commented, “This has been a very solid year for IOOF.

“Each of our businesses has seen accelerating growth in profitability and we are well placed for future growth with the acquisition of ANZ Wealth Management.

“We are unique in the industry with our advice-led business model and open architecture and we continue to attract quality advisers into our group – against industry trend.”

Advice net inflows of $4.4 billion

Net inflows from the advice division increased 48 per cent to $4.4 billion, indicating that growth by acquisition should be complemented by significant organic growth.

IOOF also delivered on the efficiency front with expenses falling by $9.4 million, resulting in the company’s cost to income ratio improving from 56.1 per cent in fiscal 2017 to 53.1 per cent in 2018.

Those considering this stock shouldn’t make assumptions regarding future earnings, nor should they base investment decisions on performances to date. Those considering this stock should seek independent financial advice.

Those considering this stock shouldn’t make assumptions regarding future earnings, nor should they base investment decisions on performances to date. Those considering this stock should seek independent financial advice.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

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