The Directors declared a third quarterly dividend for 2014/15 of 2 cents per share fully franked, payable on 15 May 2015.

Key drivers of the result

“These half-year results, a significant increase on last year’s, reflect both strong performance from non-accounting businesses and continued challenging conditions in accounting and business services,” said Mr. Barry Lambert, Chairman.

“Our diversified portfolio of businesses contributed strongly to the group result, while accounting business revenue was flat for the period,” said Mr. Lambert.

Phil Aris, Chief Executive Officer, said “Financial planning and property broking businesses have grown both organically and by acquisition. In financial planning we continue to see improvement across the Member Firms with increased confidence amongst retail investors. The group’s largest firm, Total Financial Solutions, also benefitted from new firms joining their network over the last year.

“Independent property broking group, Pacific East Coast, was one of the group’s strongest performers assisted by continued strength in the residential property market along the eastern seaboard.”

Strategy

Experience to date with member firms, and market conditions for accounting businesses have led the Board and management to undertake a major new initiative in accounting.

“Market conditions demand that accounting practice principals have access to succession solutions, and effective responses to industry changes and trends such as regulation, offshoring & technology disruption – both to stay competitive and to grow. While corporatised accounting firms can provide these benefits, we’ve also observed a common barrier to growth. When owner-operators sell 100% equity, revenue and earnings can remain flat as principals are disincentivised to drive growth,” said Mr. Aris.

“Today Countplus is launching a new business, Blue789.

“We are meeting the prevailing market with an innovative, and well-considered, shared equity business model. We will become a “growth facilitator”, partnering with businesses that are already successful, whose principals want to retain their branding and entrepreneurial control, and that have the opportunity to grow in their market.

“Practice principals will benefit from access to specialist and proven corporate expertise, funding and growth resources. Our hybrid corporate / owner operator model has received exceedingly positive responses from target businesses whose principals want both shared equity and corporate support to facilitate growth, particularly at key hurdles,” said Mr. Aris.

This is consistent with the previously announced direct equity plan for existing Countplus subsidiaries where principals and senior employees are able to acquire direct equity in their businesses.

“To deliver on this strategy we have strengthened our executive team, with the promotion of Phil Aris from highly successful Countplus business Total Financial Services to Countplus CEO, and the appointment of Barry McGee to lead Blue789,” said Mr. Lambert.

Full year

While strong first half performance is expected to continue into the second half, historically revenues from CUP accounting business have been inconsistent in the second half. The performance of equity accounted associates is expected to remain strong over the 12 months. The quarterly dividend of two cents (fully franked) is expected to be maintained.

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