Investment platform firm FNZ (NZ) returned to profit in 2014 after reporting a net loss of almost $15 million in the previous year.
According to the FNZ Holdings NZ accounts for the year ending December 2014, the company turned a net loss of $14.7 million in 2013, largely on the back of a related-party impairment, into a $5.6 million net profit after tax over the latest reporting period.
However, the group recorded a drop in revenue of about $2.3 million in 2014, raking in $19.3 million compared to $21.6 million the previous year, and a small operating loss of roughly $426,000.
While NZ-sourced ‘wrap service’ fees were up over the year from $9.8 million in 2013 to $11.2 million in the latest annual period, FNZ reported a slight drop-off in UK and Australian-based revenue.
(According to Australian industry website Investor Strategy News, FNZ has just missed out on a contract with UBS Wealth offshoot, Crestone Wealth Management, which boasts about A$20 billion under advice.)
‘System development fees’, charged to FNZ’s UK and Australian arms for “the development of bespoke platforms” fell from $5.5 million to about $3.4 million over the year.
The company also reported drop in ‘management recharge fees’ – essentially cost reallocations between FNZ global subsidiaries – during the period from about $3.2 million to $2.2 million.
At the same time cash management trust (CMT) revenue, described as fees “charged for management of clients interest earned” were steady at about $1.6 million.
After operating revenue and costs FNZ reported a loss of $426,614 before almost $7.5 million ($8 million in 2013) of ‘interest income’ tipped the firm back into the black.
FNZ’s 2014 accounts were filed late in June, just four months after the 2013 books, which included an almost $21 million impairment charge relating to missed buyout targets following the sale of its UK businesses in the previous reporting period.
“In 2013 the parent 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 was unlikely to be met,” the FNZ accounts say.
FNZ declined to comment.
The firm emerged out of an investment platform developed by Adrian Durham at First NZ Capital, includes AMP, ANZ Investments, BNZ, Fisher Funds and Public Trust in its New Zealand client list.