Euroz flags profit dip

Financial services company Euroz says it expects a small dip in half-year profits, with a strong contribution from its funds management operation offset by a significant reduction in corporate finance deals.

Perth-based Euroz expects a net profit after tax in the range of $12.4 million to $12.6 million for the six months to December 2017, compared with a $13.2 million profit in the same period of 2016.

The company managed capital raisings worth $270 million in the half-year, which is less than half the $576 million from the previous corresponding period.

Euroz said its corporate finance pipeline for the second half of the financial year had good potential.

The company’s brokerage income was steady and similar to the corresponding period in 2016.

The Euroz-managed investment companies Westoz Investment Company and Ozgrowth drove profits with gross returns of 29.3 per cent and 22 per cent respectively.

The 'mark to market' value of these investments contributed $8.4 million to the after-tax profit.

Overall the company’s funds under management increased 16.5 per cent to $1.4 billion in the final six months of 2017.

This was mainly in its Entrust business ($777 millon) and the Euroz Securities business ($294 million).

In a statement to the ASX, the company said second-half financial year performance was dependant on a variety of factors.

“The board is confident in our strategy to supplement our traditional transactional revenue streams with annuity revenue,” Euroz said

“We remind investors that our second half upside remains dependant on our ECM activity and funds management performance fees.

“The outlook for both of these significant variables is positive but also dependant on a continuation of good markets.”

The company also announced an interim dividend of 1.75 cents a share fully franked.