Wrap provider FNZ (NZ) booked an operating loss of more than $21 million in its latest published accounts after it marked down an expected earn-out payment for the 2012 sale of its UK business by over $20 million.
Last week the company also confirmed its UK CEO, Martin Jennings, would depart before the end of the year with FNZ global chief, Adrian Durham, to take on his functions.
In a statement, FNZ said Jennings’ exit was part of a “broader re-alignment of FNZ’s global operations of approximately 1,000 staff along functional lines”.
The realignment has seen a slew of executive leave the firm in recent months, including: group CFO, Laurant Chorna; head of HR, Brooke Davis, group COO, David Page; head of marketing Australasia, Patrick Liddy, and; Australian CEO, Marshall Stephen.
It is understood, former Labor Senator and FNZ Australia chairman, Nick Sherry, has assumed acting CEO duties for the Australian business.
Meanwhile, the FNZ Holdings NZ Ltd accounts for the 2013 calendar year, filed on January 30 this year, show a net loss of more than $14 million after accounting for the $20.98 million impairment.
“The parent has impaired the contingent consideration receivable from Kiwi UK Holdco No 2 Limited that arose on the sale of the business in the 2012 financial year as the target for realising this consideration is unlikely to be met,” the FNZ accounts say. “The parent has also impaired its investment in the subsidiary FNZ Limited to the expected recoverable amount.”
Excluding the impairment charge, FNZ (NZ) recorded a loss of about $300,000 on operating income of $21.6 million, which included about $10 million charged to related offshore businesses and almost $11.8 million for its NZ-based “platform services”.
The NZ-sourced income incorporates about $1.7 million of “CMT interest”, described in the accounts as “margin on interest earned by clients”.
Post the December 2013 balance date, the wider FNZ group restructured, shifting some related party receivables to the ultimate parent company, the Cayman Islands registered Kiwi Holdco Cayco.
The accounts report FNZ group related party receivables of over $110 million, which includes amounts due from the sale of the UK business.
During 2014 the FNZ UK holding company also renegotiated a new debt facility, upping the amount from ₤30 million to ₤40 million. At the same time shareholders injected another ₤10.4 million (NZ$21 million) in exchange for equity in the UK holding company.
Last year FNZ’s major rival in NZ, the ASB-owned Aegis, reported a net profit after tax of $8.3 million while growing funds under administration above $10 billion.
FNZ, which emerged out of an investment platform developed by Durham at First NZ Capital, includes AMP, ANZ Investments, BNZ, Fisher Funds and Public Trust in its New Zealand client list.
Neither FNZ (NZ) nor the firm’s Australian division returned calls to Investment News NZ (IN NZ).