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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Okay. Good afternoon, all. Thank you again for making the time for us and for giving us the opportunity to share our results with you. My name is Rahul Guha; I'm the Executive Chairman of Fiducian Services. And with me, I've got Indy Singh, who is the Executive Chairman of Fiducian Group; the Founding Director and has been with the organization for the last 27 years since inception. Indy?
Yes. Thank you. Good afternoon, everyone, and thank you for logging on. I'll get straight to the point. It's been interesting or rather strange year. We closed the year with the share market suggesting a 15% increase. But really, what went through was a little different and overall, because we charge on the average funds we hold every week, the average there actually was lower and therefore, our underlying impact for the year is likely [Technical Difficulty] last year. The last 2 or 3 months might have ratcheted up. And we now have to close with funds under management advice and administration of [Technical Difficulty]. $2.3 billion. And as of August, I think, a lot more than that.So we started, okay -- we closed at $12.3 billion, but actually, the average was a little lower than last year. However, it spells a good reason for the stock, because we're starting from a very high point to $12.3 billion. And as of now, I think, Rahul, you said it's about $12.6 billion -- it's already $12.6 billion. And it's a good starting point, which is much, much higher than the $10.9 billion I think we had in the previous year's start.You can see that over the term, over this year, there are a few transactions that we've had to absorb. The first obviously is that the fees were reduced. There was pressure from APRA to all superannuation funds, and we were no different so we reduced our fee as well, to be competitive. We have some serious salary costs from about 40 employees who have come on through the PCCU acquisition. And of course, as I explained before, the market didn't do us many favors, but hopefully, it will be stronger this year.Now all of that has been absorbed and we are looking forward to a pretty strong year. I think, Rahul, if you'd like to go through the presentation, which we have, you might start?
Thank you, Indy. So I'll share my screen. And actually, I can see you. If you can just give me a thumbs up to make sure that you are able to see the screen. actually. Okay. Great. Thank you, all again, and thanks, Indy, for the introduction. What we wanted to do is give you a business overview and look at our particular business lines.I'll start off with the platform administration. And as Indy said, it's been quite an interesting year. Platform administration, we saw net inflows of $364 million, including about $100 million from Auxilium and Badges. And the good thing is, is some of you have been following our company for quite a long time. The good thing is that, there's a lot of synergy opportunities in our business model and from our aligned advisors, almost 100% of the funds that's come in are invested in Fiducian platform and Fiducian multi-manager funds.Funds under administration in end of June 2022 was $2.7 billion, which increased to about $3.273 billion as of end of June 2023. And on the face of it, it's quite a lot of increase, which is roughly about say $500 million increase. But when you take a small step back and look at what's happened in the averages, average actually was $2.999 billion in FY 2022. And it increased slightly, including the Auxilium and Badges, $100 million. It increased slightly to about $3.027 billion. So effectively, the average did not really move much.But when we look at our June numbers -- when we look at our July 2023 numbers, the platform administration is sitting at about $3.333 billion, which is about 10% increase compared to the average we had in FY 2023. Now if I were to apply the margins that we own, on a platform, you would see that there's potentially another $1.2 million extra revenue that we could potentially earn from the additional level of funds that we had as of July 2023.
And that -- even if the markets stay static and don't go anywhere, then that revenue seems to be booked over the year.
Absolutely. Thank you. Our platform, our -- what we believe is quite advanced, and it's fully integrated to the financial planning software, as well as the client reporting, which I'll cover on a separate slide. But what we are talking about here is the core tradition branded platform, and which is really catered towards the aligned advisers that we have got. We have quite an extensive range of investments. We offer Fiducian funds, about 14 of them, which you will see in the following slides, but also about 60-odd externally managed funds and shares, term deposits and so on and so forth. And when we talk to our owner advisers, we have aligned advisors, that's pretty much what they want and the core platform is geared towards that.Just moving on to the next slide. If I look at the net fund inflows, now this [Technical Difficulty] statistics. If we were to take a step back and look at some of our bigger peers, be it AMP, be it IOOF or Insignia or Colonial or any other big names in the industry, last 4, 5 years, when you look at their platforms, every single one of them has had, not a net inflow, but a net outflow. And when you're looking at some of the big names, an outflow of $5 billion, $6 billion in a year, it's not uncommon.When you look at the slide that you've got on the screen, we have consistently produced the net inflows in Fiducian, and that's the benefit of having an aligned dealer growth, and we are able to consistently produce -- we have been able to consistently produce our next fund inflow numbers over the period. And FY 2023 hasn't been any different.On the next slide -- sorry, on the next graph on the right of the slide, you can also see a graph that shows the net revenue we have earned from the platform administration business, the linkages, the correlation between the average FU admin and also the profit before tax in the graphs. Our profit before tax margins has been quite consistent, about 66 percentage of gross revenue, and that also shows that as the -- as our funds under administration grow, there's an opportunity for the additional revenue share to go through our EBITDA as well. Now these margins also includes the -- this revenue also includes the cash margins that we hold in the platform.A quick update on the IFA market, and I'll request Indy to expand as well. But in the last financial year, we have launched low value -- low-cost value proposition Auxilium, which is seriously competing with the other disruptors in the industry and focus towards mainly the independent financial advisers network. We also launched about 2 new badges during the year, and we have got a very, very extensive investment menu, roughly about 300 managed funds, 25 managed accounts, all the ASX shares, exchange traded funds and so on and so forth. And from a standing start, we have been able to accumulate about $210 million odd under funds under administration from our badges, as well as the Auxilum product, which also includes about $100 million net inflows during the year. Indy?
Thanks, Rahul. Look, we spoke to the brokers and said, why are some of our competitors being valued at 150x earnings, and we are at about 10x or 12x? And the answer I was given was, unfortunately, we make a profit, which gave us a surprise. And the other thing was they said, you are treated like an EBITDA company, which will make a profit payer dividend. These guys are supposedly disruptors. And so I said, but that's strange because we do the same thing. And so we wanted to start a line, which I said would disrupt the disruptors, which is pretty much what's happening now through the Auxilium line and Badges, where people can come and nominate the products they want, and we just charge an administration cost for it. So we have no responsibilities, besides doing the administration well.And so that's the line that's coming along. I was a little skeptical at the beginning, but I think the take-up has been quite positive and encouraging and we're still in discussions with a lot in the marketplace. Now if you look at it with Fiducian, we've got about 80 captive financial planners that go into the Fiducian platforms and the market for Auxilium and the badges is something like 12,000 advisers around the [indiscernible]. And we're trying to capture as many as we can and get them registered on our platform so they can possibly start using Auxilium.I think as Rahul said, a low-cost option and possibly the lowest cost option in Australia, which has all the bells and whistles and services that are required and it's being managed quite well.
Thank you, Indy. Just moving on to the funds management segment of our business and a very similar story what we saw compared to the funds under administration. Although the [Technical Difficulty] balances June '22 versus June '23, increased by more than $500 million. But the average when you look at as of June 2022, the average was $4.130 billion, and that pretty much stayed stable at $4.105 billion as of June 2023. However, when we look at the July 2023 balances, the content management has got $4.592 billion as opposed to the average of $4.1 billion, which is almost a 12% increase of our FY 2023 average. And again, taking our margins and applying to this number potentially, FY 2024 could contribute an additional annualized revenue of about $2 million.In FY 2023, we also launched a couple of new products. The first product is investment bond, which we badged through Generation line and which is really offering the Fiducian growth fund.Indy, did you want to expand...
Yes. Well, you see Chalmers, our Treasurer came out and said that he is going to restrict people with higher values in superannuation funds to maximum of $3 million with no indexation. And so there are some clients who have larger amounts than that with us. And insurance bonds or investment bonds as they're called, if you can hold the money there for 10 years, you can withdraw it without having to pay any tax whatsoever. 9 years, it's a little bit of tax, but -- and even 8 years, but otherwise, it's an isolated investment. Fiducian Growth Fund is a good fund for a long-term investor and those who have surplus money and superannuation, can easily just roll the money over and transfer to the Fiducian Investment Bond.And then there's the other one, which was the Deep Green portfolio where we were asked also by the regulator that you don't have too many funds in the ESG environment. And we said we've got 2, one multi-manager and one direct and there isn't much take-up actually. People are not really investing in them. But we said, okay, we'll have one more, but we don't want just the run of the mill, because as you would have read, there's a lot of talk and fines being levied by the regulators, ASIC and APRA, on people for greenwashing, where the bulk of the stocks aren't actually ESG and they're being used. So we had one which was absolutely Deep Green, we called it, and Vegan, and there's a few people who have invested in it. And really, it's for people who believe that they want to invest in companies, that promise a better future, but we are very clear about that in the PDS, which says, look, there's a promise, but we can't assure you that it will be realized. But it's your choice, it's your money. If we wish to put something there into a company that's trying to do it, you've got to make that decision.
Thank you, Indy. And as you know, we are more of a manager style of fund manager, that is we don't select individual stock, we select fund managers, and we don't also try to shoot the lights out. Our objective is to target above average regions by taking below average risk. And what we believe is that when we do that year-on-year over the long term, we end up in top quartile and top decile. As of now, we manage about $4.5 billion worth of our client's money through about 40 different fund managers, both from Australia and overseas.The performance phase, again, on the long term, we have stacked up quite well against the world's best fund managers in Australia as well as in overseas market. We continuously -- every quarter, we do a self-assessment and we look at what Morningstar survey results have been, compared to the other fund managers on our diversified funds, and 43 out of 64 ratings against -- up to 168 fund managers, we stacked up quite well, Indy talked to it this time in the [ top quartile ].
Yes. I think the last year has been difficult, particularly because we have a focus and believe that technology is the third constant besides death and taxes, and that it will continue 24/7, whether you like it or not. Just look at your mobile phone and remember when people had to bring a switchboard lady to connect and then the dial tone. And now I'm sure many of you might be watching the world cup soccer on the phone. So that will continue, and it's not going to change. So we have a belief in technology. But when interest rates went up last year, people beat up on the technology stocks, because they felt that when interest rates go up and they discount them, their future cash flows will be impacted.But as you would have noticed with the NASDAQ recently, it's already up about 30%, even though it's about 7 stocks. But the realization will dawn, that it's a good sector to be in. And our requirement from the regulator and regulatory guide, 175346, says that you need to look at the features of the product, the risk of the product, the diversification of the product, the performance and finally, the fees. And when all the other factors are better, the fee doesn't come into account actually. And we score well on all the other things, and why would you want to put a client in a worse product when -- just because of a little fee, when they will always suffer long term. And you see the appropriate period, which is the longer term, 10 years for balanced growth stable.Now when you look at Ultra Growth, it looks like the ranking seems to have fallen, and that's true. But the return is actually quite good, 7%-odd over the year even. And the reason really is that, it's been put by Morningstar in a category, which has strange-looking funds in it where people are investing in gold, in hedge funds, in timber futures and copper futures and bitcoin and whatever you name it, and these are strange funds. But if you look at it over 10 years, they were there, too, but they didn't seem to have performed.So it will turn around. And our fund is purely liquid. They're listed securities, transparent, and we don't have any of that stuff. So when you make the wrong comparison, you get the wrong result in terms of ranking. But performance is not bad.
And continuing with this story, just touching on the gross revenue margins, we talk about 50% of the gross revenue as profit. And we have put up a slide, as you can see, in the funds management part of the business has continued to grow, with the margins remaining pretty much stable.FinTech capabilities, I touched upon it very slightly earlier, but we are one of the only -- one of the very few ones in Australia, if not the only one who has got in-house capability, both in the platform and administration system, which we call Fastrack, the financial planning software, which is FORCe and also the client reporting Fiducian Online. So all of those systems are integrated and really written in the same language, sits within the same infrastructure and fully integrated, and we are able to provide the solution to our advisers and clients. And as a result of that, we are able to create efficiencies, where a lot of our competitors are struggling a little bit.In the last financial year, we have also enhanced the security that we have got, and we have rolled out multi-factor authentication in all of our systems, and that has been accepted quite well, both by our advisers as well as clients.Touching about the financial planning part of the business. Financial planning is an enabler of steady flows in Fiducian funds and platform, and it's a very critical part of our business. We opened about 3 new offices in NSW, in Illawarra, Ultimo and Sutherland. And as of today, we have got offices in all states in Australia, across Australia. We have got about 80 financial advisers, about 41 of them salaried and 39 franchisees who operate roughly about 45 offices across Australia.In the -- compared to last financial year, we have -- in FY '24, we have changed our targets a little bit. And if you -- Indya, if you want to expand on that, please?
Yes. Well, we've talked to advisers, and one of them we've said is that, if they want to stick around, they've got to have higher inflows. People are, I think, in some cases, a bit slack, but there's been no resistance. And also, I think the fees of clients will also go up, given to be in line with the industry, which has gone up much higher than what we are suggesting, because the regulatory requirements are much higher, the compliance requirements are much higher, the costs have all shot up, and you would know that from -- when you go to do your grocery shopping, even how high prices have gone. And so that will go up and that will help to bring some more revenue in.Now with financial planning, as we said, we know our ecosystem of money coming into the platforms is -- purely the core business is our own financial planners. We can employ them or we can franchise them. When you franchise them, it doesn't cost us much, except they pay us a fee for using our technology and our services. Or we can acquire a business, which requires some form of tailoring amortization, getting them inducted into the process, and that can be a little difficult as we saw with PCCU, where we had a bit of a challenge to bring them all on board, and I think they're doing pretty well. And obviously, the third is the Auxilium, which is the additional businesses we've started. And I'm positive about it that we look forward to doing well. But for the franchises and Auxilium, really, we don't have to pay, whereas the salaried people, we buy out those people, we have to pay.
Under financial planning, we had roughly about $4.4 billion in -- end of June 2022, which grew up about $4.613 billion as of June 2023. Of these amounts roughly about $1.9 billion sits in external platforms. And as both Indy and I touched on before, the real synergies that our organization benefits from, is that when it's best for the clients -- when it's in the best interest of the clients, potentially these external -- potentially these funds held in the external platforms could be migrated into Fiducian platform and Fiducian funds, which would be beneficial for the organization as well.Now we do estimate that out of this $4.6 billion funds under advice, roughly about $700 million of that are non fee-paying, non-advise clients. What that means is that, these clients were -- used to be Fiducian clients, perhaps a long time back or maybe the acquisitions they did, they used to get clients long-term back. And in the product providers records, Fiducian is still listed as the adviser. But in reality, we don't have any engagement with these clients. We don't provide any advice and neither do we get any fees from them.We are going through a process of trying to reengage with these clients and if you are not able to reengage, we will be formally disengaging, which means from an optics point of view, the funds and the advice that we have, may potentially drop up to about $700 million. But the key point that I wanted to make is that, we're not anticipating any revenue impact, because this $700 million worth of clients are not paying fees to start with. So we only see an upside through this exercise, that is base case scenario, we will be able to reengage and the clients will be paying a fee. Worst case scenario, there won't be any impact on fees anyway, but we won't be having these clients listed as our clients and create a noise as a result.Staffing Indy, did you want to cover this slide if you can, please, on...
Yes. Look, we started the year at about 180, 178 to be exact and we brought on these new staff in Adelaide. We brought in new staff for certain activities in the office. But fortunately, the way we managed it, it's -- the number of staff has still remained static at 178. So you can see there in the slide that we've got practice managers, we've got a new HR manager and we needed additional support for IT, because the number of planners and the network has grown all across Australia, and people need support for IT, when they can't get into the system, where they need help how to operate the software.So we brought that on. The staff costs have increased, I think, $4.6 million, largely through the 40 people in Adelaide. But that's all baked into the numbers now, and we've taken that in our stride along with the other costs.
So with that, let's look at the financials for a couple of minutes or so. So FY 2023, as we saw, the FUMAA, the funds under management, advice and administration, that grew from 10.9% for the previous year to about $12.34 billion. So that's [ got a ] lot of change, 13% uplift, which is -- but as we saw before the act -- just give me a second please, I just need to mute one of you guys.And so what I was saying before is just reiterating that although the funds under -- although the FUMAA growth ended year-on-year, about 13%, the average FUMAA really remained stable. We had a [indiscernible] update in operating revenue. Although we had a 6% uplift in operating revenue, the primarily -- the increase in revenue was actually coming from the business that we acquired in February 2022, from PCCU, People's Choice Credit Union in South Australia. So as we have bought that revenue, but primarily, the revenue has still remained, the financial planning revenue, and has not translated or has not translated to a large extent in FY '23 into the synergies in platform as well as funds revenue. So although the -- effectively the net revenue remains the same, enjoyed the increase of 6%, the EBITDA actually fell about 3 percentage.And maybe let me take a quick step back and try to see the reasons why do we have an increase in 6% revenue, but the EBITDA is falling as a result of 3 percentage. And what I would assign that to, is mainly 3 reasons. One is what Indy touched upon before, that when we took on the PCCU acquisition in South Australia, we also took on their staff, which is about 40 staff, and that staff is required to provide the service that we need to provide to our clients. So essentially, what happened was, because they are one set of revenue, which is a financial planning revenue, while we have the full set of costs as well. And none of the synergies happened in FY 2023, and as a result, PCCU acquisition on a cash basis has actually contributed a loss to us in FY '23, and I'll come back to this point. But that has been one of the reasons for the decline in the EBITDA.The second reason I would assign is the -- you might recall that in last financial year's presentation, we told you that we wanted to remain very competitive in the market, and we had some pressures in the industry, as well as from APRA on the fees, and we introduced our content fees on the Core platform in February -- in June 2022, which resulted in a decline in revenue of roughly about $1 million in FY '23. The key point here is, all of those expenses as well as the reduction in revenue has already been -- have already been baked in, in the FY '23 results, and we expect that from FY '24, we won't have any additional impact.And the final reason for the EBITDA decline is the market. Again, Indy touched upon, there was lots of volatility in FY 2022, June 2022, it fell about -- market fell about 8 percentage or thereabouts. And it turned around in July '23, and then it fell again, and then it raised again. So there was a lot of volatility and effectively, as a result of that, we had a slight decline on our FUMAA, excluding the badges, and that also contributed to a decline on the revenue.And on the third point, as you saw in the earlier slides, compared to FY 2023 average, July 2023, we are already ahead and if the market stays as it is currently, we expect there's a potential for the revenue to go up, roughly about $2 million in funds under management and extra $1.2 million in funds on the platform.I just wanted to go back to what I mentioned on the financial planning acquisition, of PCCU's business. Although in FY 2023, we saw a cash loss contributing roughly maybe about $700,000 or $800,000 cash loss. But as of today, we can confirm and very pleased to confirm that the business is cash positive. We have got roughly -- as of end of July 2023, roughly about $185 million net in inflows coming from that part of the business. Some of them is transitioned from the business that we bought, but some of the others are brand new business. So we are very pleased to confirm that the business has turned around, and currently contributing to our cash positive results, where we include our synergies as well.
Yes. I think Raul is right. I'm very positive about the PCCU acquisition. Every large acquisition that any financial planning business makes, there is a bit of a hiccup about what -- where you get your revenues, where you get your synergies. Typical examples are like, IOOF's acquisition of ANZ and the other big ones. And this was no different but I think I need to congratulate the staff and the people who have worked with the PCCU people. And they've really done a great job to turn it around in about a year, and I think this could be possibly the jewel in the crown for Fiducian. They're very supportive, very cooperative. They're doing great business. They've got lots of clients coming through to them, and this could be a real winner for us.
A quick mention on the segment reporting, funds management, financial planning, platform administration looks out -- reports on their respective revenues. The Corporate Services is the area of more of the service functions, for example, legal, finance, et cetera, which provides the businesses to -- the first 3 business segments, which is the profit segment.So revenue from external clients, funds management, financial planning platform, respectively, about $25.9 million, $27 million and $19 million. And the next slide is the in-segment sales, which is the corporate services, providing services and charging a fee for that. Not so much based on the actual cost incurred, but also partly based on the capacity that each of these businesses are able to pay to the corporate services.So essentially, Funds Management, very profitable business; platform administration, quite profitable business as well. Financial planning, including the amortization is, although the profit before tax is $3.7 million, but including amortization, just about breakeven or slightly better than breakeven. What we believe is that, the strategy that Indy mentioned before is -- in financial planning business is to increase our revenue by at least about 20% and to raise the net inflow targets toward $6 million, we believe that the position would improve in FY '24 for financial planning business as well.A quick snapshot on our share price versus ASX ordinary index, cumulative index. Going back about 10 years, we have outperformed the ASX index by about 900 percentage. In fact, if -- just going to the next slide, in fact, a pensioner who might have invested in Fiducian about $1,000 in July 2012, so today, they will be getting about $312 on dividends before considering franking credits. So 31% yields on an investment that has -- in 2012, plus franking credits, so if anyone would argue or rest assured, that's quite a good return they're getting, excluding any of the capital gains that they may have received as well.In fact, out of the 23 years we have been listed, we have been able to produce double-digit returns, 17 out of those 23 years, including the TSC period and the COVID periods. Unfortunately, this year hasn't been one of them, but the Board strategy remains to produce double-digit returns over the long term. And as [ this ] -- some of the strategies that we are taking, the Board and the management is quite confident about FY '24.
Yes. I was surprised actually that to learn that Forbes Magazine has actually ranked Fiducian as one of the Top 10, I think, stocks in Australia globally. And we do have some international shareholders from the U.S. and U.K., and possibly a German one who is looking. So you can only do what you can do best, which is work hard and deliver the results.
Funds under administration management and advice, this graph shows that it's quite a steady graph over the last 5 odd years, we have been able to grow our FUMAA by about 84%, pretty consistently from -- both from organic as well as inorganic flows.Maybe I'll just reiterate this point. The FUMAA reflects recent acquisition, but that only reflects the Funds Under Advice component. Majority of the FUA, Funds Under Advice that we've acquired from PCCU hasn't translated yet, although it's in a journey, but hasn't translated yet fully to the Fiducian Funds and Fiducian Platform.So with that, I'll probably go to my last slide, which is more of a conceptual representation rather than a forecast. But what this slide does, is that it plots each of the years going back last 10 years, each of the years what the level of FUMAA has been, for example, in 2013, our FUMAA has been about $3 billion. Then it also plots what our total expenses, which includes fixed cost and variable cost. We used to report this only on fixed costs, but [Technical Difficulty] that it might be better for the shareholders to appreciate the total cost, including the variable cost, how it's moved over the years.So the red line [indiscernible], and as you can see in the red line, looking at this graph, the scale on the right side of the graph, while the FUMAA was roughly about $5 billion in [ 2013 ], the red line graph was roughly about a little bit over $10 million, about $15 million -- $14 million, $15 million in 2013. But the green graph, which is the net revenue line was roughly about $20 million. And that resulted in an EBITDA of roughly $5 million a year.Now that has grown in 2023 to about $11.9 billion in FUMAA. And as you can see over the period, our costs have, of course, grown as our business has grown and [Technical Difficulty].Although the red line has grown, but the green line -- the growth in green line has far exceeded the rate of growth in the expense line. So as a result, and you can see all of those solid lines are the actuals, while the dotted lines or the grayed out ones, are more of a conceptual projections. But we can clearly see the difference between the green line and the red line in 2013, has very much expanded in 2023, and hopefully, if we continue to grow our FUMAA, we expect that the [ jaws ] of growth has got the potential to expand further in future years, as the scalability of the business kicks in.And that's really what I wanted to share, but just reiterating, again, the last point here, what I meant before, that what we believe that as the advisers work through PCCU, the clients acquired from the PCCU, that has got the potential of accelerating our growth in these graphs and bringing some of the scalability a little bit quicker. Indy?
So we can take questions.
So that's the main things we had to share. I'll just pause for any questions that any one of her might have.
Hi. Luke Durbin here from Oracle Investment Management. I just had a question on the fee reductions there. You said that was from -- pressure from APRA. Wondering if you could maybe just elaborate on that a little bit, maybe in what form did that take? And was it across the board or was it just applied to a subset of your products?
Hi Luke. Yes, it was also market-driven, and it was pressure from APRA that was driving everyone to reduce their fees slightly. So it started with our Fiducian superannuation service, the platform, and then we extended that to Fiducian investment service, which is the [ non-superannuation ] platform to make them both consistent. And the first -- see, because our fees are scale as volumes grow, then a client pays less fee. And up to $2 million, I think, and then there's 0 after that. So a person who has $5 million, only pay fees up to $2 million and then from $2 million, it goes to 0.So yes, well, we had to do that just to be competitive. And as I say, you never want to take the regulator on, and it's a no-win situation. So when they were hinting about this, we just said let's do it quickly. Well, we were a bit cocky because things are going really well. And so we brought it forward actually to June, the previous year. And then we realized, the market at just tanked, and so it didn't help. But it's all absorbed now and going forward, I think it shouldn't matter.
This is Jack from Oracle Investment Management. I am a colleague of Luke Durbin's. I just had a question around your adviser numbers. It looks like you lost 3 franchise advisers during the half. Can you just expand on that, please?
I think a couple were because they just weren't performing at all. And I think another one was wanting to retire, so we actually acquired that business. I think one person actually passed away, and so we managed that business for a short period of time, till another one of our salaried planners wanted to start a franchise itself, and so we funded her in to take this business on. But so far, we don't really lose people, it's only when they want to retire or want to transition to some other arrangement that this happens.And also clients, I think it's a pretty captive audience, pretty sticky with our clients. They believe our service is excellent, and they are looked after well by the planners because we're very conscious about the fact that our planners must be well trained and understand the clients' needs and provide the best interest.So sticky clients, really do we lose planners, in fact, there's more coming on. I think they've just signed on another couple and 2 or 3 in the pipeline who are ready to sign up. And these are people who are coming from some of the other dealer groups. So yes, that, I suppose, answers your question, I think.
Just a quick question for me. We've nearly got $20 million in cash and then the PE, our sort of cash is like low teens sort of going forward, would you consider a buyback at all, with all the cash that you've got available?
I think I'll just repeat the question, [ Joshua ]. I think the question is that we have got roughly about $20 million in cash and would the management or the board consider buying back at this stage?
We haven't thought of buyback, because we're generally looking for new acquisitions. We find that a new acquisition, like, say, for example, a PCCU, brings much better long-term benefits. If there's nothing at all, well, then certainly, we may consider that. But it's not like we've got hundreds of millions of shares, Josh, and then a buyback can be meaningful. We have done it in the past. We haven't really found any benefits from that. But if there's nothing and certainly, we consider a buyback, we've actually upped the dividend this year. We measure it on underlying NPAT because we were building up cash and to pay it as a percentage of net profit after tax, people were possibly getting less. And so we've gone to [ underlying NPAT ] to return some of the cash to shareholders, as a fully franked dividend.
Any other questions? If not, Indy, if I can please request you to summarize and just wrap up today's session, please?
Yes, I think we've pretty much covered what happened over the course of the year. There were 3 expense items that we had to bring in. The fee had to come down, the salaries went up and the market didn't really help us much. But the year starting off is very positive. There's a -- even if the market stayed static, the revenue would be much higher, whether or not a recession unfolds by the end of 2023 or 2024, early 2024 is anyone's guess. But if that happens, obviously, it would impact our revenue, as markets generally come off, if a recession ensues.But our starting point is pretty strong. We're about $2 billion ahead -- on now even more. Another $600 million more just over the last 2 months. So the starting point is pretty good, and I think that could cushion, if there is any decline in assets and revenue. We're quite positive about the future now. Though, as I said, if Mr. Putin was to back off, then everything would change and be good. But there are risks there. [Technical Difficulty] interest rate rises. But we're well positioned, and we're getting more inflows coming through. We expect revenue to go up and I think it's a positive future for us. And thank you so much for spending time to understand Fiducian, and thank you so much for your support. We really appreciate that very much.
Thank you all. Enjoy the rest of the day.