GDG’s profit lift post Lonsec, Evidentia transactions

Fresh off the back of its announcements around splitting the functional elements of Lonsec Research after acquiring managed accounts specialist, Evidentia, Generation Development Group (GDG) has reported a solid lift in half-year net profit after tax to $78,833,000.

The group noted that it had recorded an underlying operating profit after tax of $12.4 million for the half, with Lonsec contributing $8.8 million.

The statutory profit after tax included a gain on the remeasurement of GDG’s existing interest in Lonsec of $75.1 million, up from $74.4 million after the company acquired all the remaining shares in Lonsec to increase its holding to 100%.

The company declared an interim dividend of one cent per share, fully franked.

The company noted that with respect to its annuities business, the non-advised, direct channel of the business had increased by 43% over the period, with 4,798 applications received from clients worth $25.4 million.

It noted that, “pleasingly, 336 financial advisers wrote business for the first time with Generation Life and 1,804 individual advisers had written business during the period up 21% from the prior corresponding period.

The ASX report said Lonsec reported strong revenue for the half of $35.5 million, with growth in Research and ratings seeing revenue at $21.4 million with increased numbers of products rated following the continued expansion of private market offerings.

It said Lonsec Investment Solutions reported strong growth in funds under management (FUM) closing up 19% at $12.7 billion.

It noted that Lonsec has two bank loan facilities of $20 million and $6 million and that as of 31 December, the total amount owing on the two loans is $16.9 million.

Looking over the horizon, GDG pointed to its $320 million acquisition of Evidentia last month and its status as a highly strategic opportunity.

It said that broadly it would continue to focus on enhancing its existing Life business and integrating the Lonsec and Evidentia businesses.

“Investment bond sales outlook remains strong and Lifeincome is expected to produce continued solid results,” it said. “We expect to see continued strong growth in Lonsec’s and Evidentia’s Self-Managed Accounts business.