Insignia Financial shares plunge on loss
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More news: Insignia Financial shares plunged 12.97% to $2.55 by 1:18pm AEST after it swung to a full-year loss and halted its dividend to “provide balance sheet flexibility".
Over the past 12 months the financial services company has fallen 11.81%.
Insignia Financial swings full-year to loss, pauses dividend
The news: Wealth manager Insignia Financial swung to a loss in the 2024 financial year and paused its dividend in a bid to strengthen its balance sheet.
The numbers: Insignia reported a statutory net loss after tax of $185.3 million, after delivering a $51.2 million last year, impacted by $500.8 million of remediation and transformation costs and penalties. Underlying NPAT rose 13.6% to $216.6 million, meeting its recently upgraded guidance.
EBITDA was up 10.8% to $381.3 million and closing funds under management rose 6.2% to $222 billion.
The context: Insignia paused its dividend to "provide balance sheet flexibility", having previously increased existing provisions to address a blowout in remediation costs for legacy issues related to poor financial advice and product compliance issues.
This included a $10.7 million fine paid to Australian Prudential Regulatory Authority (APRA), which accepted a court enforceable undertaking (CEU) from Insignia's OnePath Custodians (OPC) pledging to rectify compliance deficiencies and compensate members. APRA allege OPC failed to invest members’ default superannuation contributions in MySuper products.
What they said: "We acknowledge the pause in dividend payments will be disappointing for some of our shareholders however, at this time, we must prioritise strengthening our balance sheet," Insignia's CEO Scott Hartley said.
The source: ASX announcement
