Fiducian Group Limited
| ASX code: FID | www.fiducian.com.au | |
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| Share price ($) | 4.80 | |
| 12-month high ($) | 5.94 | |
| 12-month low ($) | 3.61 | |
| Market capitalisation ($mn) | 150.9 | |
| Price-to-NTA-per-share ratio | 10.2 | |
| 5-year share price return (% p.a.) | 22.8 | |
| Dividend reinvestment plan | No | |
| Sector: Financials | Company | Sector |
| Price/earnings ratio (times) | 14.5 | 15.0 |
| Dividend yield (%) | 4.6 | 5.9 |
Sydney financial services company Fiducian Group was founded in 1996 by executive chairman Indy Singh. Initially it specialised in the provision of masterfund, client administration and financial planning services to financial advisory groups. It has since expanded and is now a holding company with five divisions — Fiducian Portfolio Services is in charge of trustee and superannuation services; Fiducian Investment Management Services operates the company's managed funds; Fiducian Service is the administration service provider for all the company's products; Fiducian Financial Services manages the company's financial planning businesses; and Fiducian Business Services provides accounting and business services. In 2019 the company acquired the financial planning business of Tasmanian financial services group MyState.
Latest business results (June 2019, full year)
Revenues and profits were up again, in another solid result for the company. For reporting purposes the company divides its operations into three broad segments. The largest of these is now the company's successful funds management business, with revenues up 12 per cent and the pre-tax profit rising by 13 per cent. Financial planning revenues rose by 8 per cent, but this business remained in the red, as the company invested to grow, as well as to boost its compliance monitoring procedures in the wake of the Banking Royal Commission. The corporate and administration segment incorporates all the company's other businesses, and profits edged down on a small rise in revenues. Funds under management, advice and administration grew 10 per cent to $7.4 billion.
Outlook
Fiducian managed nine company-owned financial planning offices at June 2019, as well as 32 franchised offices, with a total of 67 authorised representatives across Australia. It is continually boosting these numbers as new offices join the group and it has also been achieving solid organic growth. Its $3.5 million acquisition of MyState's retail financial planning business, effective from July 2019, delivers a team of financial planners and more than $340 million in funds under advice. Under the acquisition agreement, MyState will in future refer customers seeking financial planning guidance to Fiducian. The funds management business offers 15 funds, and the company believes that its method of choosing fund managers with differing investment styles delivers greater diversification with reduced risks. Fiducian management have stated that they expect profits to continue to grow in the June 2020 year. However, the company is vulnerable to any major downturn in financial markets. At June 2019 it had no debt and cash holdings of more than $11 million.
| Year to 30 June | 2018 | 2019 |
| Revenues ($mn) | 45.4 | 48.9 |
| Funds management (%) | 34 | 36 |
| Financial planning (%) | 35 | 35 |
| Corporate and administration (%) | 31 | 29 |
| EBIT ($mn) | 13.0 | 13.8 |
| EBIT margin (%) | 28.6 | 28.2 |
| Profit before tax ($mn) | 13.4 | 14.3 |
| Profit after tax ($mn) | 9.2 | 10.4 |
| Earnings per share (c) | 29.42 | 33.03 |
| Cash flow per share (c) | 33.89 | 38.73 |
| Dividend (c) | 20 | 22.3 |
| Percentage franked | 100 | 100 |
| Net tangible assets per share ($) | 0.49 | 0.47 |
| Interest cover (times) | ~ | ~ |
| Return on equity (%) | 31.3 | 31.4 |
| Debt-to-equity ratio (%) | ~ | ~ |
| Current ratio | 2.5 | 2.4 |