Primed for growth: Insights from CEO Simon Madder

Prime Financial Group Limited (ASX:PFG) Managing Director, CEO and Chairman Simon Madder provides an update on the company, discussing drivers behind FY24 performance, the acquisitions of Altor Capital and Equity Plan Management, and outlook.

Abbey Phillipps: I'm Abbey Phillipps for the Finance News Network, and today I have the pleasure of interviewing Simon Madder, Prime Financial's Managing Director, CEO, and Chairman. Simon, welcome to the network.

Simon Madder: Thanks for having me.

Abbey Phillipps: Firstly, for investors new to Prime Financial (ASX:PFG), could you give us a brief overview of the company?

Simon Madder: Sure. So, Prime's an advice, capital and asset management business. We've been around for 26 years now. We currently manage about $1.2bn for clients. And we do our best work for really emerging businesses that are often founder-led and we do a lot of work with high-net-worth investors.

Abbey Phillipps: Okay. Thanks, Simon. So, Prime delivered on the FY24 guidance and reported a 21 per cent lift in revenue. What were the key contributors to this result?

Simon Madder: I think the good thing about our business is it's quite diversified. So, we're operating across accounting and business advisory, wealth management, corporate finance and also SMSF. And we had a really nice blend of contribution from all four areas. Three, in particular, really drove the result. So, we saw our wealth management division up 40 per cent for the year. Our accounting and business advisory division, again, grew quite nicely. And also our corporate finance division was up almost 30 per cent. So, we had a nice blend across different areas. I think the thing that allows us to be consistently growing the business is that we've got about 70 per cent of our revenue as recurring in nature.

Abbey Phillipps: So, Simon, you have recently completed acquisitions of Altor Capital and Equity Plan Management. Could you tell us about these businesses and what these acquisitions have added to Prime?

Simon Madder: Yeah. Absolutely. So, Altor Capital is an alternative asset fund manager. So, they do a lot of work in private credit and private equity. This is important for us because a lot of our clients are seeking access to alternatives and also property investments. So, to have that actual capability internally means that we can do a couple of things. One, offer differentiated investment opportunities for our wholesale clients. But also we now have another funding source for our business advisory clients. So, we act for about 1,000 businesses. And the fact that we've now got an in-house capability in that funds management area where we can help drive funding for our clients, it's pretty unique. So, that was important from that point of view.

In terms of EPM, it's an employee share plan management business and remuneration consulting business. We really like that because they've got 80 corporate clients that they act for, where they put share plans in place. Half of those corporates are listed and half are unlisted. We see a really good opportunity to offer other services we've already got to those corporate clients. So, that could be a finance function, it could be R&D tax incentives if they're developing products, and it could also be M&A services and corporate finance services.

I think the really important thing about when we acquire a business, we're looking for businesses with services that we don't currently have that we can offer to our client base. And, likewise, services we've got that we can offer to their client bases.

Abbey Phillipps: And, Simon, Prime has the goal to deliver group revenue of $50m in FY25, and then doubling this to $100m three to five years later. How are you going to achieve this?

Simon Madder: Yeah. So, we've been really quite consistent in our organic growth over the last three to four years. So, we've been growing 15 to 20 per cent at the organic level, so that should continue in terms of bridging from 40 to 50 mill. We'll also get the benefit this year of a full year contribution from both Altor Capital and also EPM. So, that $40m to $50m growth seems quite reasonable.

In terms of the $50m to $100m over the next three to five years, we think that'll be driven probably equally from organic growth and also acquisitions. Since October 2022, we've now done three acquisitions. And in the last half of last year, we did two. So, we're starting to improve the cadence of what we do, and we think there's an opportunity in the space that we play, across all four divisions, to actually continue to acquire, intelligently, for the right reasons.

Abbey Phillipps: And finally, Simon, what does the next 6 to 12 months look like for the company?

Simon Madder: Yeah. So, I think, without sounding too boring, it's more of the same. We'll continue to integrate the assets that we've acquired. We want to really cross-deliver more services to our existing customers, build the brand, more events, more awareness of what we do. And really become that destination for those emerging businesses, those founder-led businesses and also high-net-worth investors, where we can deliver a whole group of services for them.

Abbey Phillipps: Simon, thanks for your time.

Simon Madder: Appreciate it.