2018 was a significant year for Bell Financial Group. In addition to a strong operating performance we moved to 100% ownership of Third Party Platform, opened a New York office and launched a new investment service, the “Bell Potter Guided Portfolio Service.
Group revenue increased by 7% to $220 million producing a net profit after tax of $24.7 million, a 20% increase on the previous year (2017: $20.6 million).
The Board declared a final fully franked dividend of 4.25 cents per share, taking the full year dividend to 7.0 cents per share, fully franked.
Based on our year end closing price of 85 cents per share this represents a grossed up dividend yield of 11.8%.
Third Party Platform Acquisition
The acquisition of Third Party Platform (TPP), which took our ownership from 56.63% to 100%, was completed on 3rd July 2018. The transaction, executed via a renounceable rights issue, received strong support with 99.7% of eligible shareholders voting in favour of the acquisition and 95.4% of eligible shareholders taking up their entitlements.
This is an important transaction for the Group. Investment in technology and platforms is a core strategy which brings value through diversification and growth of non-traditional revenue streams and provides us with a significant competitive edge.
The TPP platform through its brand names, Bell Direct, Desktop Broker and Bell Potter Online, plus its white label partners Macquarie Online and HSBC Online provides access to the only fully integrated open architecture platform in Australia. It has a high degree of operating leverage and we anticipate will be an important contributor to the Group.
In addition we expect to achieve significant regulatory capital and operating synergies as TPP’s platform and technologies are rolled out and integrated across the Group.
Service – (www.bellpotter.com.au/gps)
At the end of the year we launched a new investment service, the Bell Potter Guided Portfolio Service (GPS). GPS is an efficient, cost effective way for clients to invest in a number of professionally designed model portfolios while retaining ownership and control of the underlying assets.
We anticipate this product will have particular appeal to clients of Bell Direct and Desktop Broker and to certain private clients of Bell Potter Securities.
Bell Potter New York Office
Our US licence application was approved in July and the Bell Potter New York office is now fully operational. We are confident New York will be a positive addition to the Group and will provide a new dimension to our international institutional capabilities.
In addition to Australia we now have a presence in Hong Kong, the UK and the US.
Technology is the key to our future growth. Our intellectual property (IP) provides efficiencies across all areas of our business. It has applications for marketing, business development, compliance, trade execution, clearing and settlement, customer service, price discovery, and adviser efficiency and education.
It is already a crucial element in our staff recruitment programme.
We have a dedicated technology team of 69 across the Group. In addition to IT infrastructure and support staff, we employ professional developers and programmers who not only maintain and enhance our existing platforms, but also have a number of projects in the development stage.
- IQ – our price discovery and trade execution platform is being progressively rolled out across the network. We believe we will have the opportunity to market IQ to third party users in the future.
- FUSION – our unique client relationship management (CRM) and compliance desktop application, purpose built for Adviser productivity.
- TPP – our fully integrated open architecture execution and clearing platform.
We also provide product and platform services such as cash, margin lending, superannuation, portfolio administration, fixed income and managed funds which utilise third party technologies.
Aggregate revenues across these various products and services in 2018 was $52.1 million representing 24% of Group gross revenue.