Sequoia flags impairments and provisions
Financial services group, Sequoia Financial Group has confirmed to the Australian Securities Exchange (ASX) that it expects to recognise several non-cash impairments and provisions relating to the Shield Master Fund and First Guardian Master Fund collapses.
In an update filed with the ASX, Sequoia said these are expected to include:
- A provision for potential claims under the insurance excess payable under our professional indemnity insurance.
- Impairment of intangible assets pertaining to the Licensee and Adviser Services Division.
“The impairment of intangible assets adjustment are non-cash in nature and will not affect underlying operating cash flow or the ongoing performance of the Group’s core business units,” the announcement said.
The market update noted that despite challenging conditions, particularly to its Licensee and Adviser Services Division, the Group continued to perform ahead of the prior corresponding period at the EBITDA operating profit level.
It said that EBITDA year to date November showed an increase of approximately 15% on the prior corresponding period.
The announcement said this result is prior to any allocation of Head Office costs, impairment charges or non-operating expense items.
Did they provide a reassuring note to investors that if claims against Interprac become significant, they will simply shut it down, transfer the assets and employees to another entity, and leave innocent advisers to pick up the compensation cost. Just as Evans & Partners did with Dixons.