IOOF (ASX:IFL) share price jumps as profit surges 19%

Shares in the Aussie wealth manager are on the move today

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The IOOF Holdings Limited (ASX: IFL) share price is climbing in early trade after the wealth manager’s latest full-year results.

IOOF share price on watch as profit jumps 19%

Some of the key takeaways from the IOOF result include:

  • Revenue up 31% on the prior corresponding period (pcp) to $770 million
  • Group funds under management, advice and administration (FUMA) of $453 billion including 15% organic growth
  • Underlying net profit after tax (UNPAT) up 19% on pcp to $147.8 million
  • Final franked dividend of 11.5 cents per share, including a 2 cents per share special dividend

The IOOF share price is climbing higher on Thursday following the latest full-year result.

What happened in FY21 for IOOF?

The MLC acquisition was completed in May 2021 and represents a major strategic pillar for IOOF. IOOF reported its synergy run-rate of $12 million per year was achieved by 30 June and remains on track to deliver $80 million to $100 million by the end of FY22.

The company’s Evolve21 migration saw over 38,000 accounts transferred and is on track to complete by December 2021.

IOOF reported net inflows of $1.1 billion into its Portfolio and Estate Administration business with a turnaround in net flows into Investment Management in Q4 2021.

The IOOF share price fell 7.6% lower throughout FY21 despite climbing steadily higher in calendar year 2021.

What did management say?

IOOF CEO, Renato Mota, had the following to say about the full-year result:

This year has been transformational with the successful completion of the MLC acquisition on 31 May.

The increase in our revenue and UNPAT evidences our commitment to growth, both through transformation as well as benefits of recent acquisitions. The MLC acquisition is proceeding well and our integration plans remain on track.

Through the transformation of our business, we expect to deliver synergy benefits during FY22 and beyond.

Longer-term, we continue to see significant opportunities through the expanding addressable market and changing demographies which are increasingly driving demand for our quality financial wellbeing advice, contemporary administration services and expanded investment capabilities.

What’s next for IOOF and its share price?

IOOF outlined some key priorities for the current financial year. These include delivering annualised run-rate synergies of $80 million to $100 million from the MLC acquisition and completing its product and platform review.

The IOOF share price has climbed 43.1% higher in 2021 and is outperforming the S&P/ASX 200 Index (ASX: XJO) by 30.4% this year.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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