Full Year 2026 WT Financial Group Ltd Earnings Call
Speaker #1: Good afternoon, everyone, and welcome to the 2026 financial year-end results presentation for W2 Financial Group. My name is Tim McGowan, and I'm the host of today's session.
Speaker #1: before I introduce WTL's CEO, Mr. Keith Cullen, some quick housekeeping: the format for today is a 20-minute presentation followed by Q&A. If you'd like to ask a question, put your name on the question and use the Q&A box provided; we've already had several questions submitted by shareholders during the week.
Speaker #1: Please note that this session is being recorded, and we'll be available for later playback on the company website during the week. Keith, that's all the housekeeping.
Speaker #1: Over to you.
Speaker #2: All right. Terrific, Tim. Appreciate that. We'll see if we can get it through in 20 minutes. Good afternoon, everyone. Appreciate you taking the time to join us.
Speaker #2: And for those I haven't met, I'm Keith Cullen, the founder and managing director of WT Financial Group. Look, many of you know our story pretty well, so I'm not going to spend half an hour retelling it.
Speaker #2: Instead, what I'd like to do is just spend a few minutes on what the 2026 result tells us about the business that we've been building, and that we have built, and then look forward at the opportunity developing across financial advice more broadly that, importantly, why we believe that WTL is particularly well-positioned to capture it.
Speaker #1: Missing? Over to you.
Speaker #1: Has grown from around $4 million to more than $33 million. In that time, EBITDA has moved from a loss to $8.2 million, and NPAC from a loss to $6.6 million.
Speaker #2: All right. Terrific, Tim. Appreciate that. We'll see if we can get it through in 20 minutes. Good afternoon, everyone. Appreciate you taking the time to join us.
Speaker #2: And for those I haven't met, I'm Keith Cullen, the founder and Managing Director of WT Financial Group. Look, many of you know our story pretty well, so I'm not going to spend half an hour retelling it.
Speaker #1: And during that period, we acquired and integrated four networks. We've invested heavily in technology, in risk management, in our professional development, and in practice management capabilities.
Speaker #2: So 2026 represented our 6 consecutive year of compounding growth. We've built scale, we've built infrastructure, and capability, and we've built an advisor community. And really demonstrated, I think, that the model can produce sustainable revenue and profit growth.
Speaker #2: Instead, what I’d like to do is just spend a few minutes on what the 2026 result tells us about the business that we’ve been building, and that we have built, and then look forward at the opportunity developing across financial advice more broadly, and, importantly, why we believe that WTL is particularly well positioned to capture it.
Speaker #1: And we've built the national platform that we have today. The important thing isn't simply that the lines go up; it's really been the heavy lifting required to create the platform.
Speaker #2: So today isn't really about proving the model anymore. We think the model is proven, and the more interesting question for us and our shareholders now is really what can we do with it.
Speaker #1: And that's all substantially behind us. And that, I think, changes the economics of what we have coming next. So, if we could hop onto the next slide, please, Tim.
Speaker #2: So, 2026 represented our sixth consecutive year of compounding growth. We've built scale, we've...
Speaker #2: So, Tim, if you'd hop onto the next slide for us. Just looking at WTL today, 30 seconds on it, we support more than 500 financial advisors, operating through around 400 privately owned practices.
Speaker #2: About 25 billion dollars or more in assets under advice in the business. And these all operate through our Wealth Today, Sentry, Synchron, and Millennium Three networks.
Speaker #2: So we've got the 4 networks there, but what we've really built behind those individual brands is a shared operating platform. And that platform provides licensing, technology, advice support, most importantly, risk management, professional development, and also the sort of practice growth capability that we bring to bear for the practices in our network.
Speaker #2: And so the practices retain their own individual identities, they retain the client relationships, and the entrepreneurial independence. And we provide the infrastructure and the scale around them.
Speaker #2: Scale is useful, but scale combined with entrepreneurship is much more powerful. So if we hop onto the next slide, please, Tim. The simplest way of understanding our journey of 6 consecutive years of growth is that net revenue and other income has grown from around $4 million to more than $33 million.
Speaker #2: In that time, EBITDA has moved from a loss to $8.2 million. NPAC from a loss to $6.6 million. And during that period, we acquired and integrated 4 networks.
Speaker #2: We've invested heavily in technology, in risk management, in our professional development, and practice management capabilities. And we've built the national platform that we have today.
Speaker #2: The important thing isn't simply that the lines go up; it's really been the heavy lifting required to create the platform. And that's all substantially behind it.
Speaker #2: And that, I think, changes the economics of what we have coming next. So if we hop onto the next slide, please, Tim. The growth is really translating into earnings.
Speaker #2: So 2026 demonstrates that operating leverage is beginning to emerge in the business, and this is what we've been seeking to build: a platform that would enable us to really apply some operating leverage.
Speaker #2: Net revenue and other income increased 15.6%. EBITDA grew faster. It was up 19.5%. Net profit before tax increased just over 19%. The statutory NPAC increase of 6.9%, or just under $5 million, really the difference between that net profit before tax and net profit after tax growth is just the tax line.
Speaker #2: Our ability to use previous carried-forward losses, etc., is starting to wane off. And so our income expense increased from around $857,000 to nearly $1.6 million.
Speaker #2: So the operating story is very clean now. Revenue is growing, and earnings are growing faster. So if you hop onto the next slide for us now, please, Tim.
The growth is really translating into earnings. So, 2026 demonstrates that operating leverage is beginning to emerge in the business. And this is what we've been seeking to build—a platform that would enable us to really, uh, apply some operating leverage. Net revenue and other income increased 15.6%. EBITDA grew faster; it was up 19.5%. Net profit before tax increased just over 19%.
Speaker #2: I think a key thing is that the balance sheet is really improved across that time as well. It's strengthened materially. We finished June with 16.8 million in cash.
Speaker #2: Net current assets more than doubled to $11 million. Net assets increased to $34 million. And net tangible assets moved from a negative $1.4 to a positive $2.4.
Speaker #2: So really, as we enter 2027, it's not just we're stronger earnings, but I think with a substantially greater financial capacity that provides flexibility. So next slide, please, for us, Tim.
The statutory and Pad increase of 6.9% or just under 5 million. Really? The difference between that um, net profit before tax and net profit after tax growth is just the tax line. Our our um, ability to use previous carry forward losses. Uh, Etc. Is starting to weigh in off and and so our income expense increased from around 857 to nearly 1.6 million. Uh, so, uh, you know, the operating store is very clean. Now, revenue is growing and earnings are growing faster.
So, if you could hop onto the next slide for us now, please, Tim.
Speaker #2: That's the one. Thank you. Look, you'll also notice that borrowing has increased 2.5 million during the year. That was deliberate. We've had a bunch of questions on it throughout the week, and since we put the numbers out, we drew additional corporate funding ahead of year-end in anticipation of investment opportunities that we thought were going to progress before the end of the year.
Speaker #2: So we drew that down. We haven't deployed it yet, but we will be deploying it. As of the 30th of June, we had $9.2 million.
I think a key thing is that the balance sheet is really improved across that time as well. It's strengthened materially. Uh, we finished June with uh 16.8 million in cash. Net current assets, more than doubled to 11 million. Uh net, net assets, increase to 34 million and net tangible assets. Moved from a negative 1.4 to a positive 2.4. So really as we enter 2027, uh, it's not just with stronger earnings, but I think with a substantially, uh, greater Financial capacity that provides flexibility.
Speaker #2: In drawn facilities, against and $16.8 million in cash, and about $2.5 million of undrawn facilities. So this wasn't debt required to fund operating business or the operating business.
Speaker #2: It was a deliberate decision to ensure we had the liquidity and the funding capacity available to move on the next attractive opportunities. So next slide for me, please, Tim.
Speaker #2: That's the one. Just having a look at shareholder returns. At the same time, as we've been improving the balance sheet and growing the revenue and profitability, the statutory return to an average shareholder's equity was about 15%.
Speaker #2: The board has declared a three-quarter of a cent dividend as its final dividend for the year, bringing total dividends with respect to 26 to 1 cent a share, fully franked.
So next slide please for us. Tim, that's the 1, thank you. Um look you'll also notice that borrowing is increased 2.5 million during the year that was deliberate. I've had a bunch of questions on it throughout the week and since we put the numbers out uh we drew additional corporate funding ahead of uh year end uh in anticipation of uh investment opportunities uh that we thought were going to progress before the end of the year. Um, so uh, we drew that down, we, we haven't deployed it yet but we, uh, we, we will be deploying it as at the 30th of June. We had 9.2 million in drawn facilities, uh, against and 16.8 million in cash, and about 2 and a half million of undrawn facilities. So, uh, this wasn't debt required to fund operating business. The operating business that was a deliberate decision to ensure, we had the liquidity in the funding capacity available, uh, to move on, uh, the next attractive opportunities.
So, next slide for me, please, Tim.
Speaker #2: So that's about 3.4 million dollars being returned to shareholders in respect of the year. And so we really don't see growth in shareholder returns as mutually exclusive.
Speaker #2: We're investing in the future while we're returning capital today. So let's have a look as to why we think the investment opportunity is so attractive.
That's the one. Um, just having a look at the shareholder returns at the same time, as we've been, you know, improving the balance sheet and, uh, growing the revenue and profitability. Uh,
Speaker #2: If you can move onto the next slide, Tim. More demand, supplied constraint or constrained supply. So we've talked a lot about this over the last couple of years, so we won't get bogged down on it.
Speaker #2: But structurally, the industry equation remains quite extraordinary: Australia's got well more than 4 trillion dollars in just appraised superannuation funds without even considering the extra trillion in SMSS.
The statutory return that to, uh, an average shareholders Equity was about 15%. Um, the board has declared a 3/4 of a cent dividend as its final dividend for the year bringing total dividends with respect to 26 to 1 cent, a share fully franked. So that's about 3.4 million being returned to shareholders in respect of the year. And so you know we really don't see growth and shareholder returns as mutually exclusive.
We're investing in the future while we're returning capital today.
Speaker #2: We've got around a quarter of a million people a year each and every year now retiring or reaching that retirement age. People are living longer.
So let's have a look. As to why we think the investment opportunity is so attractive—if you could move on to the next slide, Tim.
Speaker #2: Financial decisions around retirement are becoming more complex. Look, against this demand, we've only got around 15,000 advisors. And so more people need advice. There's more wealth requiring advice.
More demand-supplied constraint, or constrained supply.
Speaker #2: And they're just simply isn't enough advisors. But I'll be very clear on this: tailwinds alone don't create shareholder value. Everyone can see the same opportunity.
Speaker #2: The real invest the real question is for investors: the same as we pose to our advisors all the time, who has the machinery and the ability to capture it?
A quarter of a million people a year, each and every year now, are retiring or reaching that retirement age. People are living longer. Financial decisions around retirement are becoming more complex.
Speaker #2: So next slide for me, please, Tim. This is this one that I say tailwinds are just not enough. We've spent six years building; we've built scale more than 500 advisors.
Look, against this demand we've only got around 15,000 advisors, and so more people need advice. There's more wealth requiring advice, and there just simply aren't enough advisors.
Speaker #2: We've built alignment with those practices. When our practices grow, we participate. We've built real capability. Infrastructure individual practices can't economically replicate. And we've been very focused on building a community.
Speaker #2: We've got hundreds of business owners sharing their experience, sharing their intellectual property. And increasingly, we have capital through our investco and hubco model. So if you put those together, I think WTL has become something quite unusual.
But I'll be very clear on this: tailwinds, alone, don't create shareholder value. Everyone can see the same opportunity. The real question for investors, which is the same as we pose to our advisors all the time, is who has the machinery and the ability to capture it. So, next slide for me please, Tim.
This is this one that I say tailwinds are just not enough. Um,
Speaker #2: We don't simply have exposure to the opportunity. We've built real machinery to capture it. But it's important to understand, I think, how all that machinery comes together and how it works.
Speaker #2: So if we flip onto the next slide, Tim. This is where we talk about the critical thing for us being alignment, not control. So WTL doesn't employ 500 advisors.
Speaker #2: These are independently owned businesses, and they're run by entrepreneurs. So when we acquired the four networks, we didn't acquire the businesses supporting those advisors, but we also didn't acquire the trust, to be honest.
We've spent six years building. We've built scale—more than 5,500 advisors. We built alignment with those practices. When our practices grow, we participate. We've built real capability—infrastructure in individual practices that can't economically be replicated. And we've been very focused on building a community. We've got hundreds of business owners sharing their experience, sharing their intellectual property, and increasingly, we have capital through our Investco and Hubco model. So if you put those together, I think WTL has become—
Speaker #2: Look, from an advisor's perspective, some of those transactions were a little like an arranged marriage. They woke up one morning, and they had a new licensee that they hadn't chosen.
Something quite unusual. We don't simply have exposure to the opportunity—we've built real machinery to capture it. But it's important to understand, I think, how all that machinery comes together and how it works. So, if we flip onto the next slide, Tim...
This is where we talk about a critical thing for us—being alignment, not control.
Speaker #2: So we've spent years earning their trust, demonstrating that we're financially aligned with them, that we're philosophically aligned with them, and that we're not there to interfere unnecessarily in their business.
So WTL doesn't employ 500 advisors; these are independently owned businesses, and they're run by entrepreneurs.
Speaker #2: And that really counts because you can't have your you're cake and eat it too. You can't tell people they're independent entrepreneurs and that's where the future opportunity rests.
Speaker #2: And then at the same time, issue instructions from head office telling 500 advisors how to run their business. No question our approach is harder.
Speaker #2: It's one advisor. One practice. And one improvement at a time. But across a network of this scale, those improvements really compound. So Tim, if we hop onto the next slide, please.
Speaker #2: And if my friend David Hines is watching, we can give him credit for this one because David's often said of many things that should be done in the to capture the supply-demand opportunity and advice.
So when we acquired the 4 networks, we didn't acquire the businesses supporting those advisors, but and we also didn't acquire the trust to be honest is, you know, look from a, from an advisor's perspective. Some of those transactions were a little like uh an arranged marriage, you know. They woke up 1 morning and they had a new license fee that they hadn't chosen. So we've spent years earning, their trust demonstrating that we're, uh, financially aligned with them that we're philosophically aligned with them, um, and that we're not there to interfere unnecessarily in their business, and, and that really counts because you can't have your your cake and eat it too. You can't tell people that independent entrepreneurs and that's where the future uh, opportunity rests and then at the same time issue instructions from head office telling 500 advisors how to run their business.
Speaker #2: They're pretty straightforward, but they're not easy. And this slide really demonstrates the potential mathematics of all of the opportunity compounding. Today, gross advisor revenue across the networks around 220 million dollars, a little bit higher than that.
No question—our approach is harder. It's one advisory, but across a network of this scale, those improvements really compound.
So, Tim, if we could hop onto the next slide, please, um...
Speaker #2: If we keep working on pricing confidence and we get that generally to improve within the network, we've illustrated a pathway towards approximately 330 million.
Speaker #2: If advisors can build capacity to serve more clients and we're really focused on working with them and helping them do that, that pathway potentially becomes considerably larger again.
And if our friend David Hines is watching, we can give him credit for this one because David's often said of many things, um, that should be done to capture the supply-demand opportunity and advice. They're pretty straightforward, but they're not easy.
And this slide really demonstrates the potential mathematics of all of the opportunity compounding.
Speaker #2: The 660 million figure is illustrative only. It's not a forecast. The point is the mechanism. Pricing confidence, advisors understanding the commercial value that they bring, into play for advisors and being more confident around it.
Today on Growth Advisor, revenue across the networks is around $220 million, a little bit higher than that.
Speaker #2: Capacity building through the use of AI tools and automation, getting that average number of clients served per advisor, which is already higher than the market averages in our network, up from sort of 140 towards 240, even onto 300 where some of our best practices are.
If we keep working on pricing confidence and we get that generally to improve within the network, we've illustrated a pathway towards approximately $330 million.
Speaker #2: That capacity building, building lead flow to backfill the capacity, advisors focusing on enterprise, none of those happens because we flick a switch. Pricing confidence in particular can take a long time to change with advisors.
If advisers can build capacity to serve more clients, and we're really focused on working with them and helping them do that, that pathway potentially becomes considerably larger. Again, this—the $660 million figure—is illustrative only, it's not a forecast. The point is the mechanism: pricing, confidence, advisers understanding the commercial value that they bring into play for advisers, and being more confident around it.
Speaker #2: Advisors who have undercharged for a decade don't suddenly reprice because we send them an email. I described it the other day as literally hand-to-hand combat.
Speaker #2: It's buy advisor and buy practice at a time. Straightforward, but not easy. But increasingly, we're proving that it works. So Tim, if you could flick onto the next slide with me.
Capacity building through the use of AI tools and automation—getting that average number of clients served per advisor, which is already higher than the market averages in our network, up from around 140 towards 240, and even up to 300, where some of our best practices are—that's capacity building.
Building lead flow to backfill the capacity. Advise focusing on enterprise.
Speaker #2: Part of our mantra really in what we're doing is what we call scale without surrender or a philosophy of scaled sovereignty. Look, great entrepreneurs don't want someone sitting in head office telling them how to run their business.
Pricing confidence, in particular, can take a long time to change with advisors—advisors who have undercharged for a decade can't suddenly reprice just because we send them an email.
Speaker #2: And you don't make them better entrepreneurs, better business with dictates from head office. Practices want to retain their identity, their leadership, their culture, and their client relationships.
I described it the other day as literally hand-to-hand combat. It's, it's by advisor and by practice at a time; straightforward, but not easily easy. But increasingly, we're proving that it works.
I said, Tim, if you would flick on to the next slide for me,
Speaker #2: And they also want to retain the entrepreneurial upside, that comes from improvements. So what we add is the scale, the infrastructure, risk management. We add that technology and capability.
Speaker #2: And we can add in capital. And that's where our investco and hubco strategy is becomes the ultimate expression of that philosophy. Investco is deliberately structured as a long-term investment platform.
Part of our mantra, really, in what we're doing is what we call 'scale without surrender,' or a philosophy of 'scaled sovereignty.' Look, great entrepreneurs don't want someone sitting in head office telling them how to run their business, and you don't make them better entrepreneurs or build better businesses with dictates from head office.
Speaker #2: So it's not your traditional private equity vehicle with a predetermined exit horizon. Its purpose is to support entrepreneurs over many years. And this sentence really captures the philosophy better than anything else that we've put on the page here.
Speaker #2: When liquidity events do occur, they're expected to be driven by the ambitions of the entrepreneurs and the shareholders involved, rather than the investment structure that we've created in itself.
Speaker #2: So our investment structure is built to serve the entrepreneurs, not the investment not the entrepreneurs serve the investment structure. So if we hop onto slide 13, Tim, I think that's the one recurring revenue to enterprise value.
Practices want to retain their identity—their leadership, their culture, and their client relationships. And they also want to retain the entrepreneurial upside that comes from improvements. So, what we add is the scale, the infrastructure, risk management. We add that technology and capability, and we can add in capital, and that’s where our InvestCo and HubCo strategy becomes the ultimate expression of that philosophy. InvestCo is deliberately structured as a long-term investment platform, so it’s not your traditional private equity vehicle with a predetermined exit.
Horizon.
Speaker #2: This is where the core business and hubco come together. So our core business of WTL and hubco come together. We start with more than 500 advisors, generating recurring revenue.
Speaker #2: We use what we call our four pillars of pricing confidence, capacity building, lead flow, and enterprise value and succession to help them build more productive businesses.
Its purpose is to support entrepreneurs over many years, and this sentence really captures the philosophy better than anything else that we've put on the page here. When liquidity events do occur, they're expected to be driven by the ambitions of the entrepreneurs and the shareholders involved, rather than the investment structure that we've created itself. So, our investment structure is built to serve the entrepreneurs, not the investment—the entrepreneurs, not the investment structure.
So, if we hop onto slide 13—Tim, I think...
Speaker #2: And those better businesses are creating enterprise value through corporatization, proper succession planning, and M&A within our network. So WTL can then participate in that value through investco directly through the hubco putting equity into the hubcos.
That's the 1 recurring revenue to enterprise value.
This is where the core business and HUBco come together. So our core business of WTL and HUBco come together. We start with more than 500 advisors generating recurring revenue.
We use what we call our four pillars.
Speaker #2: And selectively, making investments within our broader ecosystem. And that last piece is really important. As the profession corporatizes, it needs more capacity, technology, automation, and specialist services.
Of pricing. Confidence capacity building.
Speaker #2: We've seen a the last bit there about sort of kindred businesses and looking at those. We've seen a version of this playbook executed extremely successfully in general insurance, where businesses like Steadfast and Ausbrokers both built valuable ecosystems of services and capabilities around their underlying broker network.
Lead flow and enterprise value and succession to help them build more productive businesses. And, you know, those better businesses are creating enterprise value through corporatization, proper succession planning, and M&A, uh, within our network. So WTL can then participate in that value through InvestCo, um, directly through the HubCo, uh, putting equity into the HubCos, um, and selectively...
Speaker #2: So look, we see similar opportunity emerging around financial advice. Critically, our model remains capital light by default. And with capital available when it's attractive for us to co-invest.
Making investments within our broader ecosystem — and that last piece is really important. As the profession corporates, it needs more capacity, technology, automation, and specialist services.
Speaker #2: So let's have a look at what that looks like in practice, Tim, if we can hop onto the next slide. Income today, enterprise value tomorrow.
Speaker #2: Oh, we missed one there, I think, Tim. Just slip onto the next one for me. Oh, no, you've got it right there. Sorry, you do have it right there today, Tim.
We've seen a—we, we, we—the last bit there about sort of kindred businesses and looking at those, we've seen a version of this playbook executed extremely successfully in general insurance, where businesses like Steadfast and and OSB Brokers both built valuable ecosystems of services and capabilities around their underlying broker network. So, look, we see a similar opportunity emerging around financial advice.
Speaker #2: Is tightened advice group. So tighten was our first hubco. And really, it's providing genuine proof of concept. Is investco deployed around 3.4 million dollars into what we call tag tightened.
Critically our model remains Capital, light, by default, and with, um, Capital Avail available when, uh, it's attractive for us to, uh, to co-invest. So, let's have a look at what that looks like in practice. Tim, if we can hop on to the next slide.
Speaker #2: Group. And at the same time, WTL received direct tag equity recognizing our contribution of services of approximately 800,000 dollars all issued at a dollar a share.
Income today. Enterprise Value tomorrow.
Oh, we missed one there. I think, Tim—
Speaker #2: And when we did the last tag transaction, acquisition is the business was revalued and revalued at a dollar 63 a share. So if you have a look at our statutory accounts for the year, you'll see highlighted in the accounts in the notes that that generated around half a million dollars of direct fair value uplift in our audited result.
Speaker #2: And implies a value of approximately 5.8 million on that initial 3.4 million worth of investment by investco. So within that, there's about another 335,000 of additional economic uplift attributed to WTL.
And revalidated at $1.63 a share. So,
Speaker #2: Through its ordinary interest in investco, that isn't separately recognized in the 2026 fair value gain. And then on June 30, WTL received another nearly 700,000 of tag shares through the Vestor acquisition that we detailed to market and has also detailed in the account.
Speaker #2: So importantly, it's not just about capital appreciation, though. Tag is generated in excess of 15% return dividend flow. It's gone on to acquire Rushby Financial and Fusion Partners Accounting.
Speaker #2: It's grown. It's enterprise value to more than 70 million dollars net of debt. So I think we're already seeing what the model was designed to produce.
Speaker #2: That was income. Acquisitions and consolidation. And also capital appreciation. So if we hop onto the next slide, please, Tim. So this one, we've had a different entrepreneur, same sort of alignment.
if you have a look at our statutory accounts for the year, you'll you'll see highlighted in the accounts in the notes that that generated around half a million dollars of direct. Fair value uplift, uh, in our audited result um and implies a, a value of approximately 5.8 million on that initial 3.4 Million worth of investment by investor. So within that, there's about another 3305 thousand of additional economic uplift attributable, to wtl through its ordinary interest in investco that isn't separately separately recognized in the 2026 fair value game. And then on June 30th, W received another nearly 700,000 of of tag shares through the Vesta acquisition that we detailed to Market. Uh, and is also detailed in the account. So importantly, uh, it's not just about capital appreciation, though. A tag is generated uh, in excess of 15%, uh, return.
Speaker #2: Tightened advice group isn't a one-off structure. It's the first of our hubco model that we're rolling out. Select advice group demonstrates another version of the model.
Speaker #2: So investco has deployed around 3.2 million into select and newly bringing those foundation businesses together, to create what's affectionately known as our hubco 2, or otherwise known as select advice group Australia.
Dividend flow, you know, it's gone on to acquire rushby financial and fusion Partners accounting. Uh it's grown, its Enterprise Value uh to more than 70 million dollars, net a debt. So I think we're already seeing what the model was designed to produce. That was income, Acquisitions, and consolidation and also capital appreciation.
So, if we hop onto the next slide, please, Tim.
Speaker #2: Select advice group Australia has gone on to acquire Savor Wealth and Legacy Planning. Those transactions have settled. And so today, that leaves us with investco holding around nearly 32%.
So, this one, we've had different entrepreneurs—same sort of alignment.
Speaker #2: WTL having 6.8% directly. And the principals and vendors retaining a bit over 61%. And we've already had our first distributions from SAGA. And they're supporting and expected return again above that 15% per annum before considering franking and tax consequences.
Tighten Advice Group isn't a one-off structure. Uh, it's the first of our HubCo model that we're rolling out. Selected Vis Group demonstrates another version of the model. So InvestCo has deployed around $3.2 million into Select and New Leaf, bringing those foundation businesses together to create what's affectionately known as our HubCo 2, or otherwise known as Select Advice Group Australia.
Speaker #2: So great value being created there. And this is all before we've seen the real further value creation out of corporatization and that
Speaker #1: Scale that comes to putting these businesses together and already sagas out , looking at additional acquisitions as is Titan Advice Group , and then a third version of it is demonstrated in our hub code three or life Sumo , which is a different version .
Speaker #1: We're backing an existing entrepreneur and entrepreneurial led practice here . We're backing it with initial at an initial enterprise value of 6.6 million .
Speaker #1: Invest goes initial commitments 1.8 million with the founder retaining 68% . Invesco holding around 2,526% and WTOL having that 5.7% directly for an originating .
Select device group, Australia has gone on to acquire, uh, saver wealth and Legacy planning. Those transactions have settled. And so today, that leads us with Invesco holding around, uh, nearly 32%, uh, wtl, having 6.8% directly and the principles and vendors retaining a bit over 61%, and we've already had our first distributions from from Saga and their supporting, uh, and expected return. Again, above that 15% per Ram before considering franking and and, um, uh, and tax consequences so, um, you know, great, um, uh, value being created there. And this is all before we've seen the real further value creation out of corporatization and the scale that comes to putting these businesses together and already saga's out, looking at it at additional Acquisitions uh, as is tightened by group.
Speaker #1: This opportunity and coordinating all the due diligence and so on . So Invesco has set aside . Additional capacity to commit to this model to support further acquisitions .
Speaker #1: So the point of all of this is there isn't a single rigid hub code template . The model adapts as to the entrepreneur and to the opportunity .
Speaker #1: So if we hop on to the next slide , please . Tim . And this is an important one about rebuilding the profession .
Speaker #1: You've heard us talk a lot about the supply constraints in the profession This is another significant accelerator in the business . For about six years now , we've been we've been growing .
And then, a third version of it is demonstrated in our Hub code, 3 or life Sumo which is a different version. Um, we're backing an existing entrepreneur, an entrepreneurial lead practice here. Um, we're backing it with initial with at an initial Enterprise value of 6.6 million investors, uh, initial commitments, 1.8 million with the, uh, founder retaining 68% Invesco holding around 25.26% and wtl having, uh, that 5.7%, uh, directly, uh, for an originating, this opportunity and coordinating. All the due diligence, and so on.
Speaker #1: And the advice profession has effectively been operating with one hand tied behind its back . The entry pathways into the profession had become unnecessarily restrictive .
So Investco set aside additional capacity to commit to this model, uh, to support further acquisitions. So the point of all of this is there isn't a single rigid hub code template; the model adapts to the entrepreneur, uh, and to the opportunity.
Speaker #1: Advice had become increasingly difficult and expensive to provide an advisor capacity has really been constrained . So those things are now beginning to change .
So, if we hop onto the next slide, please, Tim—and this is an important one about rebuilding the profession—you've heard us talk a lot about the supply constraints in the profession.
Speaker #1: Is the government has committed and then recommitted again . And just a week or so ago , when Treasurer , assistant treasurer , Doctor Daniel Merlino spoke at the Press Club , he confirmed again the government's commitment to more realistic education pathways .
This is another significant accelerator in the business.
For about six years now, we've been
Speaker #1: And that means that we can get back to recruiting advisors again . Simpler advice regulation is on its way , meaning more Australians will be receiving advice and technology and automation are really meaning more advisors per advisor , clients for advisor rather so WTOL doesn't need a new strategy to benefit from any of this .
Speaker #1: We've been part of the profession's push for the reformation of those education standards . We've already got the platform in place , and so the key growth in advisor numbers for us , we see will come in this next wave of not us having to go out there and recruit more practices into the network .
This means that we can get back to recruiting advisors again.
Speaker #1: We absolutely don't need that , but we're really excited about those education reforms enabling advisors to get back to recruiting within the existing practices that we've got .
Speaker #1: So we think that's another significant opportunity in the pipeline . So we'll move on to the next slide . Please . Tim , we say proven today optionality for tomorrow .
Speaker #1: And that's really how I'd like to leave shareholders thinking about WTOL , our core business has already proven we've coalesced together . These four disparate businesses , a couple that were really losing money and a couple that were , you know , breaking even making a little bit of money .
Speaker #1: And we put them into in together into a cohesive operating unit , built a single platform . We've built the advisors , we've built the advisors trust , and we're setting about growing both their revenue , which grows our revenue , and also improving our margin through leveraging that scale .
Simpler advice, regulation is on its way. Uh, meaning more Australians will be receiving advice and technology and automation are really meaning, more advisers, uh, per advisor. A more clients for advisor rather. So wtl doesn't need a new strategy to benefit from any of this. We've been part of the uh, professions push for the Reformation of those education standards. We've already got the platform in place and so um, the key growth in advisor numbers for us, we see will come in this next wave of not us having to go out there and recruit more practices into the network. We absolutely don't need that, but we're really excited about those education reforms enabling advisors to get back to recruiting within the existing practices that we've got. So we think that's another significant opportunity in the pipeline.
So, we'll move on to the next slide. Please, Tim.
Speaker #1: So we think the core business has proven , you know , six consecutive years of growth . 8.2 million worth of EBITDA , still very conservative levels of debt in the business , generating a approximately 15% return on statutory return .
We say, "Proven today, optionality for tomorrow," and that's really how I'd like to leave shareholders thinking about WTL.
Speaker #1: On our average equity , $0.01 fully franked share , a fully franked dividend per share across 2026 . And on top of that , we've got optionality .
Our Core Business is already proven, we've coalesce together, these 4, disparate businesses, a couple that were really losing money in a couple that were, you know, breaking even making a little bit of money and we put them in, in together into a cohesive operating unit, build a single platform. We've built the advisors, we built the advisors trust and we're setting about growing.
Speaker #1: So a solid business there with real optionality . Our four pillars program of that pricing confidence , capacity building , helping advisors build their lead flow and build their equity value .
Speaker #1: We've got industry reform underway . We've got that hub model that we're deploying that early stages . It's already proving itself up , and we've got so we've got equity emerging in the ecosystem .
Speaker #1: And , and , you know , we're participating in enterprise value that we're helping build . So , you know , you don't have to believe all of this happens tomorrow It certainly won't .
About their revenue, which grows our revenue and also improving our margin through leveraging that scale. So, we think the core business has proven, you know, 6 consecutive years of growth 8.2 million worth of ibida. Um, still very conservative levels of debt in the business, um, generating a, an approximately 15% uh, return on a statutory return on our average Equity. Um 1 cent fully Frank share, um fully Frank dividend per share across 2026
Speaker #1: You know , this isn't a light switch that we turn on . It's it's hundreds of people within our network making better business decisions over time .
Speaker #1: But investors aren't being asked to fund a loss making company . In the meantime , while they wait and see whether our thesis works , because the business already works .
Speaker #1: So , I mean , I'd say to our shareholders , you own a profitable dividend paying business today . And at this stage of our development , I think you're getting a very inexpensive look at what it really can be become and what we're designing it to become .
And on top of that, we've got an optionality. So a solid business there with real optionality, our 4 pillars program of that pricing confidence capacity, building helping advisors build their lead flow and build their their Equity value. We've got industry reform underway, we've got that. Uh, hubco model that we're deploying that early stages. It's already proving itself up. Um, and we've got, so we've got Equity emerging in the ecosystem.
Speaker #1: The last six years were really about building that platform and earning the right to do , including the trust with our advisors to do what comes next .
Speaker #1: So the next five years for us are about compounding that . So I guess rather than me taking you through , you know , the remaining accounts line by line , Tim and I thought we'd leave plenty of time to , to dig into details and to answer any questions .
And and you know, we're participating in Enterprise Value that we're helping build. So you know you don't have to believe all of this happens tomorrow. Um it's certainly won't you know this isn't a light switch that we turn on. Um it's it's hundreds of people within our Network making Better Business decisions over time but investors aren't being asked to fund a loss-making company in the meantime while they wait and see whether our thesis works because
Speaker #1: You've got . So I think if we move on to the next slide , it's probably a Q and A one . Tim .
The business already works. So I mean, I'd say to our shareholders, you you own a profitable dividend paying business today. Um, and at this stage of our development, I think you're getting a very inexpensive. Look at what it really can be become and what we're designing it to become.
Speaker #1: I'm hoping it is . And I didn't leave anything out . Yes , there we go . It is so really happy to sip of water and answer any questions that everybody has .
Speaker #1: Thanks , Keith .
Speaker #2: You take a breather and we've got several questions here . We had a couple of family offices reach out and and wanted an explanation on the roughly $1 million uplift in it .
Speaker #2: And telephone spend . So it took actually their operating expenses to around $1.7 million in the second half . Can you explain that , please ?
Speaker #1: Yeah . Well , so that's true . And it's an important point , Tim . But what I'd like to say is that our telephone be a lot of telephone expenses that telephone and it it's not a case of them suddenly blowing out .
The last 6 years were really about building that platform and and earning the right to do including the trust with our advisors to do. What comes next? So, the next 5 years for us are about compounding that. So, I guess, rather than me taking you through, you know, the remaining accounts line by line Tim, and I thought we'd leave plenty of time to, um, to dig into details and to answer any questions you've got. So I think if we move on to the next slide, it's probably a Q&A 1. Tim. I'm hoping it is and I didn't let him anything out. Yes, there we go. It is so um really happy to take a sip of water and and answer any questions that everybody has thanks Co you, you take a breather and uh we've got several questions here. Um
Speaker #1: It's it's predominantly some reclassification of technology related costs . So we reclassified a bunch of things that had previously been sitting up in in cost of goods sold that were really not directly related to generating revenue .
Speaker #1: So a bunch of our technology costs , as we need to pay , whether we've got 100 advisors or 1000 advisors . And so we've , we've more properly reclassified them to where they where they belong .
We had a couple of family offices reach out and, and, uh, wanted, uh, an explanation on the roughly $1 million uplift in IT and telephone spend. So it took actually the operating expenses to around $1.7 million in the second half. Can, can you, uh, uh, explain that please? Yeah. Well, uh, it—so that's true and it's an important point, Tim. But what I'd like to say is that our telephone—a lot of telephone expenses, that telephone and IT...
Speaker #1: We've also continued investing in infrastructure of supporting the advisors that we've got cyber data capability platforms . So there's some genuine investment in there .
Uh, it's not a case of them suddenly blowing out. It's, um, it's predominantly some reclassification of technology-related costs. So,
Speaker #1: But it's not an uncontrolled cost blowout . It's it's deliberate expenditure on supporting scale . And I'd say despite , you know , those reclassification issues that is predominantly .
Um, we reclassified a bunch of things that had previously been sitting up in cost of goods sold that were really not directly related to generating revenue. So,
Speaker #1: But despite some of the increases that there were within , there is Ebit are still increased . 19.5% for the year
Speaker #2: Thanks , Keith . And now you're holding around almost $17 million in cash on the balance sheet against around $9 million worth of debt .
Speaker #2: Why not net these at each other , out with each other ?
Speaker #1: Oh , look , I think , Tim , the answer to that is probably optionality . You know , we're really entering a period where we see attractive opportunities across the hub code strategy and potentially other strategic investments around adjacent services to , you know , try and in a manner replicate what was done .
And so we've we've more properly, reclassified them to where they um, where they belong. Uh, We've also continued investing in infrastructure of supporting the advisors that we've got, um, cyber data capability platforms. So there's some genuine investment in there, um, but it's not an uncontrolled cost blowout. It's um, it's deliberate expenditure on supporting scale. Um, and I'd say despite, you know, um, those reclassification issues it is predominantly but despite some of the increases that there were within, there is even a still increase 19.5% for the year.
Speaker #1: So successfully in the , in the general broking , general insurance broking business . So we want balance sheet flexibility to move quickly when those opportunities arise .
Speaker #1: And , and look , clearly , we're not we're not going to hold on to expensive debt indefinitely simply for the sake of holding cash .
Speaker #1: We'll continually assess the cost of that capital against the opportunities in front of us . But but right now , it's you know , I think we've got a really well balanced balance sheet to excuse the pun , right now , we value having liquidity , though , and funding capacity available when opportunity is there to an opportunities are expanding all the time mate .
Speaker #2: And advisors numbers have been flat . That's known within the industry . You grew gross revenue to 12.7% , or by 12.7% , you've got 500 advisors in the network .
Thanks cliff. And, um, now you're holding around, uh, almost 700 million dollars in cash on the balance sheet against, uh, around $9 million worth of debt. Why why not net these at each other out with each other? Oh, look, I think Tim the answer to that is probably optionality. You know, we're we're really entering a period where we see attractive opportunities across the Hub Coast strategy and and potentially other strategic Investments around adjacent services to, you know, try and in a manner. Replicate what was done? So successfully in the in the general broking, um, General Insurance broking business, so we want balance sheet, flexibility to move quickly when those opportunities arise and and look clearly we're not, we're not going to hold on to expensive debt, indefinitely simply for the sake of holding cash, we'll continually assess the cost of that Capital against the opportunities.
Speaker #2: Is that coming from more advisors or more revenue per advisor ?
Speaker #1: No . The growth definitely coming from more revenue per advisors . So , you know , it's more generate more revenue being generated across the network rather than adding advisor numbers .
Speaker #1: I think we did have a net net growth of , of some , you know , 20 advisors or something across the course of the year .
Speaker #1: But it's exactly the thesis we've discussed today . Tim . We're helping practices improve their pricing confidence , build their capacity , helping them serve more clients and become better businesses .
Speaker #1: And , and , but , you know , look , it's not every advice is suddenly increasing revenue by 12.7% . I think I use the expression with you the other day that we that , you know , I put into this slide deck , which is really it's hand to hand combat .
Speaker #1: It's and we've got a great network of , of our regional managers to help us do this . Right . And this is a huge part of our resource because this is .
Speaker #1: One advisor at a time , one practice at a time that you help suddenly get that pricing confidence . When I say suddenly it's , you know , after weeks , months , years of , you know , talking them through it , helping them build all of the things that they need to build to be more confident about their expressing their value propositions with their clients .
In front of us. But but right now it's, you know, I think we've got a really well balanced balance sheet um to excuse the pun. Um, right now we value having liquidity though it's and and funding capacity available when opportunity is there to um an opportunities are expanding all the time mate and and advises the numbers have been flat, um that's known within the industry. You grew growth Revenue to 12.7% or buy 12.7%. You got 500 advisers in the network is, is that coming from more advisors or more Revenue per advisor, know the growth is definitely coming from more Revenue per advisors. So, um, it's, you know, it's more Jenner more Revenue being generated across the network rather than adding advisor numbers. I think we did have a net net, net growth of of of some, you know, 20 advisor or something um across the course of the year. Um, but it's exactly the thesis we've discussed today. Tim, we're helping practices improve their pricing confidence, build.
Speaker #1: And then they have that epiphany and they start to charge properly . So , you know , some are repricing , some are adding clients , others are adding advisors or support staff .
Their capacity, helping them serve more clients and and become better businesses and and um but you know look it's not. Every advice is subtly increasing Revenue by 12.7%. I think I I use the expression with you the other day that we that, you know, I put into this slide deck which is really its hand to hand combat it. It's and we've got a great network of of our regional managers to help us do this, right? We and this is a huge part of our resource because this is 1 advice.
Speaker #1: And some are just simply improving their own personal capacity . But when each of those incremental improvements compounds across 500 advisors , they , they really start to produce meaningful network level growth .
Speaker #1: And , and because our economics are aligned with our advisors , you know , we participate in revenue share with the vast majority of our practices , we participate without advisor numbers having to grow themselves .
Speaker #1: It gives us that that leverage of the base that we've got in place .
Speaker #2: And we had some more detail today on , on the Hub , Coe example , if you like Titan , what what do you think the first Hub Co's proven and do you think it's a repeatable model ?
Speaker #2: There's also a question around how many times could you repeat this before management costs increase by having new management in place or additional manager ?
Speaker #1: Okay , I think I'll answer the first part of the question , Tim , to start with . But look , I'd say that What the whole Titan experience has proven is that the model can generate multiple layers of economic value at the same time .
Were at a time 1 at a time that you helped suddenly get that pricing confidence. When I say Suddenly It's, you know, after weeks months years of, you know, talking them through it, helping them build. All of the things that they need to build to be more confident about better expressing their value, propositions with their clients and then they have that Epiphany and they start to charge properly. So, you know, some are repricing, some are adding clients, um, others are adding advisors or support staff and some are just simply improving their own personal capacity. But when each of those incremental improvements compounds across 500 advisors, they they really start to produce meaningful Network level growth and and because our economics are aligned with our advisors, you know, we participate in Revenue share with the vast majority of our practices. Um, we participate without advisor numbers having to grow themselves. It it gives us that, um, that leverage of the base that we
Speaker #1: And look quite clearly . It's the whole Invesco and Hub model has been a difficult one to articulate to the market because . But but the difficulty in articulating that is starting to be be realized where the opportunity really sits , the difficulties in the multi layers .
Got in place and and we had some more detail today on on the hubco. Um, example, if you like, um, Titan. Um, what, what do you think, the first hubco has proven, and do you think it's a repeatable model? There's also a question around
Speaker #1: But where the opportunity sits is in the multiple economic layers of economic value , it can create . So Invesco has deployed about 3.4 million into Titan .
How many times could you repeat this before management costs increase by having new management in place or additional management? Okay, I think I'll answer the first part of the question, Tim, to start with. But look, I'd say that, um,
Speaker #1: We've already seen dividend returns of well in excess of 15% , Titan's completed further acquisitions using its own balance sheet and using debt .
Speaker #1: And the latest transaction price , where it raised some capital from its existing foundation shareholders . Was that a $1.63 a share ? And so WTOL benefited through its direct equity .
Speaker #1: It's benefited through its economic interest in Invesco Plus , of course , through its ongoing network revenues and through its transaction activity . So we're getting income today while we're building enterprise value for tomorrow .
Me, realize where the opportunity, uh, really sits. The difficulties are in the multi-layers, but where the opportunity sits is in the multiple, um, uh, layers of economic value it can create. So, Investco deployed about $3.4 million into Titan. We've already seen dividend returns of well in excess of 15%.
Speaker #1: And that's exactly what the model is designed to do . I'd say underpinning all of that though , you've got to remember , is who's benefiting the most out of that .
Speaker #1: Are those foundation shareholders , the practitioners in the group , the advisors in the group , the , the , the revenue of Titan overall is growing .
Speaker #1: We only grow and benefit when our practices do as well . And so that is the beauty of this great alignment that we have with them .
Speaker #1: Tim . The second part of that question was around management , and I'm thinking , Tim , you , you , the question related to our management .
Titans completed further acquisitions using its own balance sheet and using debt, and in the latest transaction price, WTL raised some capital from its existing foundation shareholders. That was at $163 a share, and so WTL has benefited through its direct equity, it's benefited through its economic interests in Invesco, plus, of course, through its ongoing network revenues and through its transaction activity.
So we're getting income today, while we're building enterprise value for tomorrow. And that's exactly what the model's designed to do.
Speaker #1: Yeah . Look , I think we've got that already . And we've probably seen it . We've seen some additional costs with outsourced .
Speaker #1: Look , I put together or shared with a practice that's just looking at a hub co transaction with us at the moment . I shared our internal confidential document with them that they should consider in when they're considering a hub co structure and in the back of that document , it's got a full list of the resources that we bring to bear .
Speaker #1: And you've got to remember we've got 60 odd full time staff in this business . And when I look through and looked at all of the people that are contributing a bit of working on what would normally need to be a dedicated M&A team , including our external internal resources of our valuers and the people that do our peer reviewing for us and support the legal due diligence .
I'd say underpinning. All of that though, you've got to remember is whose benefiting the most out of that. Are those Foundation shareholders, the practitioners in the group, um, the advisors in the group? Um, the, the, the revenue of Titan over all is growing. Um, we only grow and benefit when our practices do as well. And so that is the beauty of this great alignment that we have with them. Tim the second part of that question was around management and I'm thinking, Tim, you, you you the question related to our management? Yeah.
Speaker #1: There's 29 people involved in that process , so I don't think we're any time soon having to , you know , build a dedicated M&A team .
Look, I think we've got that already, and we've probably seen it. We've seen some additional costs with outsourced. Look, I, I put together um, or or shared with a practice that's just looking at a hubco. Um, transaction with us at the moment I shared our internal confidential document with them that they should consider in when they're considering a hubco structure and in the back of that document, it's got a full list of the resources that we bring to bear. Now, you've got to remember, we've got 60 odd.
Speaker #1: This is the whole beauty that I keep talking about in terms of we've got a successful , profitable business here . Now , and we're increasingly looking at ways of leveraging the resources of that business .
Speaker #1: The key resource of it being its human capital and its human resources . And so we've got this fantastic team of regional managers out there that are supporting practices every day with their pricing confidence , their capacity building and so on , regardless of whether those practices are looking at Hub co strategies .
Speaker #1: But those regional managers are really the first people that those practices talk to when they're looking at building a succession plan , where they're looking at ways of retiring debt , of making acquisitions and so on .
Speaker #1: So , you know , in a , in a normal model that would , they'd be a deal origination team . Well , we've got a network of nine of those , plus our chief operating officer , David Newman , that looks after them .
Speaker #1: And so this is the sort of leverage that we've got . We've got our chief financial officer , Michael Peters , very experienced in due diligence in M&A and so on .
Uh, full-time staff in this business. And when I look through, I looked at all of the people that are contributing a bit of working on what would normally need to be a dedicated m&a team, um, including our external resources of our valuers and the people that who our peer reviewing for us and support the legal due diligence, there's 29 people involved in that process. So, um, I don't think we're any time soon having to, you know, build a dedicated. Um, m&a Team. This is the whole beauty that I keep talking about. In terms of we've got a successful profitable business here now and we're increasingly looking at ways of leveraging, the resources of that business, the key resource that have been its human capital and its human resources. And so we've got this, fantastic team of regional managers out there that are supporting practices every day with their pricing confidence, their capacity building and so on regardless of whether
Those practices are looking at HUB code strategies, but those regional managers...
Speaker #1: We've got myself working on it . So we're able to bring together a very significant number of resources without having to go out and build a very a very expensive team to do it .
Speaker #1: So it's really all about leverage for us there , Tim . And it's working really well .
Speaker #2: And just on that Titan Hub Co , there was a revaluation to $1.63 . How is that determined
Speaker #1: Well the revenue is up and the profitability is up . And the scale of the business is up . Tim . So , you know , across the 12 months or so since the three original businesses came together , they then leveraged their and came together in a debt free proposition .
Speaker #1: They then leveraged their balance sheet and brought on a bank , bank debt from a leading bank to , to fund two more acquisitions .
Speaker #1: And so you've seen EBITDA expansion , there significantly , and you've moved it up into a much larger enterprise that's valued at seven and a half times its EBITDA .
Are really the first people that, um, those practices talk to when they're, um, looking at building a succession plan, where they're looking at ways of retiring debt of making Acquisitions and so on. So, you know, in a, in a normal model that would they be a deal origination team? Well, we've got a network of 9 of those plus, our chief operating officer, David Newman that looks after them. And so, this is the sort of Leverage that we've got. We've got our Chief Financial Officer. Um, uh, Michael Peters, um, very experienced in due diligence in m&a. And so on, we've got myself working on it. So we're able to bring together a very, uh, significant number of resources without having to go out and build a very, a very expensive team to do it. So it's really all about leverage for us. Their 10 minutes working really well and just on that tight and hub code there was a re-evaluation to a $163. How how's that determined? Well on the revenue is up and the profitability is up and the scale of the business is up Tim. So you know, across
Speaker #1: Its EBITDA now , rather than sort of being a collection of small businesses . And we talked about this a few months ago when we did another presentation , Tim , where we we saw that there's just that valuation uplift in , in scale businesses .
Speaker #1: You know , micro businesses trade at a certain either revenue model or EBITDA model . The larger they get , the , the , the , the higher that multiple gets .
Speaker #1: And I think the dollar 63 is conservative because I think that valuation came in at seven and a half times Ebit . You know , if the if the founders and majority shareholders of that business decided to sell it tomorrow , there'd be a significant control premium over that .
The 12 months or so, since the 3 original businesses came together, they then leveraged their, in, in, in a cave together in a debt-free proposition, they then leveraged their balance sheet and brought on, um, a bank bank debt, from a leading Bank, um, to, to fund 2 more Acquisitions. And so you've seen, uh, ebit or expansion there significantly and you've moved it up into a much.
Speaker #1: I'd imagine that would would be paid , you know , in terms of Ebit evaluation . But
Speaker #2: And you touched on kind of WTO investing in the broader advice ecosystem , which is probably a new concept . You've discussed today , rather than just kind of advice practices , what does that actually mean ?
Speaker #2: And you've spoken about drawing on another $2.5 million worth of debt . Is the opportunity in this space ?
Speaker #1: Yeah . Look , I think you potentially , Tim , as I think his practice has grown corporatized , they increasingly need capabilities that aren't efficiently , efficiently built by themselves .
Speaker #1: And so include , you know , their power planning services . And we've talked a lot about para planning in the past sort of ten years has been a race to the bottom on quality and price .
There are multiple gaps. And I think the $63 million is conservative because I think that valuation came in at seven and a half times. Even, you know, if the founders and majority shareholders of that business decided to sell it tomorrow, there'd be a significant control premium over that. I'd imagine that would be paid, you know, in terms of the debt evaluation, but...
Speaker #1: You know , as people offshored en masse to try and drive down the cost of production . We think para planning now becomes a race to the top on , on , you know , AI is enabling much better qualified people to do what had been outsourced overseas to try and cut costs .
Speaker #1: And so we think it becomes a race to the top in terms of the value that really well qualified onshore para planners can add to advisors as they build capacity .
Speaker #1: And but then there's , you know , there's automation technologies . And then there's specialist services around things like , you know , aged care advice and so on where there's strong consumer demand .
Speaker #1: And so , you know , we think where we can identify businesses that solve those problems across not just the hub code , but across the network , more broadly , there could be further opportunities for , for WTS and Invesco to invest in those businesses .
And, and you touched on kind of wtl investing in the broader, uh, advice ecosystem, which is probably a new concept of discussed today, uh, rather than just kind of device practices like, what does that actually mean? And you've spoken about drawing on another 2 and a half million dollars. Worth of debt is, is the opportunity in this space? Yeah, look. I think you, you potentially Tim as I think. It's practice is growing corporatized. They they increasingly need capabilities that aren't efficiently efficiently built by themselves. And so that might include, you know, their power planning services. And we've talked a lot about par planning in the past, sort of 10 years has been a race to the bottom on quality and price. Um you know, as people offshore on mass to try and drive down the cost of production, um we think power planning now becomes a race to the top on on, you know, AI is enabling much better qualified people to do. What had been outsourced overseas to try and cut costs and so we think it becomes a
Speaker #1: And , you know , I mentioned it before , we've seen that play playbook executed , extremely successfully in in general insurance businesses like steadfast and Brokers didn't simply assemble networks of brokers over time .
Price to the top in terms of the value that really well qualified onshore power planers can add to advisors as they build capacity. Um, and but then there's, you know, there's automation um Technologies, um and then there's specialist services around things like um you know, aged care advice and so on where there's strong consumer demand and so
Speaker #1: They built a whole ecosystem of complementary services and capabilities around those networks . So , you know , we're not trying to replicate either of those businesses directly , but the principles really relevant , if we can invest selectively , not just in the businesses , in our network , but in businesses that help advisors become more productive and valuable , we potentially benefit twice through both the growth of the advice businesses and also through our participation in in those businesses , providing those capabilities .
Speaker #2: And that ecosystem opportunities sit outside the general hub co idea
Speaker #1: Well , I think yeah , I mean , what I'd say is that they're aligned to it or they're kindred to it rather than sitting outside it .
Speaker #1: So you might consider them a different type of hub . For , for example . Or they might be just done directly by WTOL .
Speaker #2: And we've started to see the first numbers from the hub co obviously , how important is that for WTOL moving forward ? And is Hub Co moving beyond just kind of a succession strategy ?
You know, we think, um, where we can identify businesses that solve those problems across, not just the Hub codes, but across the network more broadly, there could be further opportunities for for wtl and, and invest code, um, to invest in those businesses. And, you know, I mentioned it before we've seen that play, Playbook executed extremely successful in in general insurance. Um uh businesses like Ste steadfast and OSB Brokers didn't simply assemble networks are Brokers over time. They build a whole ecosystem of complimentary services and capabilities around those networks. So, you know, we're not trying to replicate either of those businesses directly, but the principles really relevant, if we can invest, selectively, not just in the businesses in our network, but in businesses that help advisors become more productive and valuable, um, we potentially benefit twice through both. The growth of the advice businesses and also through our participation in in those business.
Speaker #1: I think it's way more than a succession strategy . It's definitely a succession strategy for for some practices that are , you know , if you look at the ones that we've done to date is probably , you know , there's , I like if I count it up , the , the transactions involved in the hub co so far , we've got one , three , four , five , six , seven , eight .
This is providing those capabilities, mate, and those ecosystem opportunities sit outside the general hub code idea.
Well, I think, yeah, I mean, what I'd say is that they're aligned to it, or they're kindred to it, mate, rather than sitting outside it. So you might consider them a different type of hub code, for example, or they might be just done directly by WTL.
Speaker #1: We've got about 16 transactions that have been underlying those . And I'd say to you , only 2 or 3 of those practices rather , has it been a deliberate succession plan in terms of , you know , a retirement plan for an advisor ?
And we've started to see the first numbers from the HubCo, obviously. Um, how important is that for WTL moving forward? And then, is HubCo moving beyond just kind of succession strategy?
Speaker #1: So succession plan in the traditional terminology or parlance , that's used . But the succession planning is more broadly in the thinking of all of the practices involved , because increasingly younger advisors that are salaried advisors , not just in our network , but outside of it , are looking at what's their succession look like from salaried advisor into more senior advisor into an equity owner in the business .
I think it's way more than a succession strategy. It's definitely a succession strategy for some practices that are, you know, if you look at the ones that we've done today, there's probably, you know, if I counted up the transactions involved in the Hub Co so far, we've got—uh—one, one, three, four, five, six, seven, eight.
We've got about 16 transactions that have been underlying those, and I'd say to you,
Speaker #1: So the succession is more sophisticated , but but the succession planning bid is not the thesis , right ? Each of our hub co starts with an entrepreneur who wants to build something larger and stronger .
Speaker #1: And so some of the participants might be approaching retirement . Others are at exactly the opposite end . Their ambitious owners who want capital , they want acquisition capability and stronger infrastructure so that they can accelerate their growth and others then , and this would be fairer .
Only two or three of those practices, rather, has it been a deliberate succession plan in terms of, you know, a retirement plan for an advisor. So, succession plan in the traditional terminology or pilots that's used. But the succession planning is more broadly in the thinking of all of the practices involved because increasingly, um, younger.
Speaker #1: The mix that we've done of those 15 or 16 , we've talked about already , others , others want to release some equity while continuing to lead and grow their businesses .
Speaker #1: So that's why I talk about that term of scaled sovereignty . We're providing the long term minority capital and the capability around the entrepreneurs , rather than buying them out .
Advisors that are salaried advisors, not just in our network but outside of it, are looking at what their succession looks like—from salaried advisor into more senior advisor, into an equity owner in the business. So the succession is more sophisticated, but the succession planning bit is not the thesis, right? Each of our HubCo starts with an entrepreneur who wants to build something larger and stronger.
Speaker #1: And , you know , imposing this top down , predetermined model or even and more importantly , we're not imposing a predetermined exit .
Speaker #1: So the purpose is always to support the entrepreneurs over many years . And when liquidity ultimately occurs , it'll be driven by the ambitions of those entrepreneurs and the fellow shareholders involved , rather than being driven by the investment structure .
Speaker #2: And I think we'll finish on this question in terms of financial advice and demand for the industry . And of course , I think you've said this before , the government has a way of kind of meddling and making changes as they move ahead .
Speaker #2: So we've seen some CGT tax changes . What's what's that meant for WTO practices in terms of demand .
Speaker #1: Oh well I mean I wouldn't isolate a measurable network sort of uplift from any any one change what I'd say to you is what we you know , complexity .
Capability and stronger infrastructure so that they can accelerate their growth and others then. And this would be fair at a mix that we've done of those 15 or 16. We're talking about already others others want to release some Equity while continuing to lead and grow their businesses. So that's why I talk about that term of scaled sovereignty. We're providing the long-term minority capital and the capability around, um, the entrepreneurs rather than buying them out. And, you know, imposing this, um, the top down predetermined model or even. And more importantly, we're not imposing a predetermined exit. So, the purpose is always to support the entrepreneurs over many years, and when liquidity ultimately occurs, it'll be driven by the Ambitions of those entrepreneurs and the fellow shareholders involved rather than being driven by the investment structure.
Speaker #1: Tim creates a demand for advice . And so as much as it drives me insane when the government meddles with tax and , and superannuation or retirement settings , it does actually create more demand for advice every time they make one of these changes , there are clients who need to understand what those changes mean for them .
And I think we'll finish on this question—in terms of financial advice and demand for the industry. And of course, I think you've said this before: the government has a way of kind of meddling and making changes as they move ahead. Um, so we've seen some CGT tax changes. What's that meant for WTL practices in terms of demand? Oh, wow. Um, I mean,
Speaker #1: So , you know , part of the broader structural thesis we've discussed today , Australians are accumulating more wealth while all these decisions are are emerging around them .
I wouldn't isolate a measurable network, um, sort of uplift from any one change, um,
Speaker #1: And so managing that wealth that's been created , it does become more complicated . And so those changes create conversations and advice opportunities .
Speaker #1: But I wouldn't try and attribute a particular percentage to , to any single policy change
Speaker #2: , because that's all the questions . We've covered them all today . Thanks for your time . Great presentation .
What I'd say to you is what we you know complexity tin creates a demand for advice and so as much as it drives me insane when the government medals with tax and and superannuation or retirement settings um it does actually create more demand for advice there there. Every time they make 1 of these changes there are clients in need to understand what those changes mean mean for them. So you know, part of the broader structural thesis we've discussed today
Speaker #1: Yeah , thanks very much , Tim .
Australians are accumulating more wealth.
Speaker #2: Thanks , everyone for your time . I recording of this webinar will be on the company website at the end of the week .
While all these decisions.
Uh uh, are emerging around them and so managing that wealth that's been created, it does become more complicated and so those changes create conversations and advice opportunities, um but I wouldn't try and attribute a a particular percentage um uh to to any single policy change.
Um, because that's all the questions—we've covered them all today. Uh, thanks for your time. Uh, great presentation. Yeah, thanks very much, Tim.
Thanks, everyone, for your time. A recording of this webinar will be on the company website at the end of the week. Thank you.
