Count in profit as CBA’s remediation indemnity drops to $5.9m

Nearly four years after the Commonwealth Bank sold Count Financial to Count Plus its remediation indemnities have decreased to $5.9 million.

The CBA remediation provision represents an important number in the context of the bank’s remaining 35.85% stake in Count Limited which yesterday posted a net profit after tax of $2.613 million for the first half – an increase of 1%.

Just a year ago, the Commonwealth Bank announced that it had increased the lmit of the indemnity provided to Count from $300 million to $520 million and the remediation exposure is regarded as being closely tied to CBA’s continuing stake in Count.

Importantly, the Count Limited result has been announced just as it completes its acquisition of Diverger and speaks volumes for the mutual benefits the two financial planning licensees saw in gaining scale.

The Count Limited share price closed at 67 cents on Tuesday.

Count Limited’s underlying net profit after tax (NPAT) rose 1% to $2.613 million notwithstanding the company using its announcement to the Australian Securities Exchange (ASX) to point to its underlying earnings before interest, tax and amortisation (EMITA) being up 9% to $5.436 million.

Count also emphasised that it had “invested in accelerating the transition of Affinia Advisers to the Count AFSL following completion of that transaction in May, last year.

“Count will achieve significant scale and earnings diversification in Wealth following completion of the Affinia and Diverger transactions with over 550 advisers and the CARE managed portfolios.

At the same time, what will be Diverger’s final first half results report to the ASX revealed NPAT up 51% to $1.84 million but with scheme costs taken into account, a statutory net loss after tax of $1.04 million.

The Diverger commentary noted continued growth in the company’s client base with more than 333 licensed/self-licensed advice firms, 1,408 subscribing accounting firms and 145 firms supported with Technology.

In his commentary attaching to the company’s release to the Australian Securities Exchange (ASX), Count chief executive, Hugh Humphrey said that the company would achieve significant scale and earnings diversification following the completion of the Affinia and Diverger transactons with over 550 advisers and CARE managed portfolios.