New Acta and new CEO
Acta has increased its focus on the largest and most affluent clients in the strategic segment. These clients typically have investable holdings of between NOK 500,000 and NOK 10 million and will be served 1:1 with first class advisory services in a concept called Acta Invest. Acta will gradually increase its focus on clients with investable holdings in the upper end of this interval. These clients will typically have more complicated advisory issues and will be served by a team of advisors in a business concept called Acta Partner.
Acta will develop an alternative model with a fixed annual management fee and profit split as an alternative to today's price model. The mass affluent segment with investable holdings between NOK 100,000 and 500,000 will now receive services in form of product information and execution of orders made by clients by phone and online. Acta Direct, which this concept is called, has ambitions of expanding its operations and also including new services like online stock broking.
Profitable operations excluding restructuring costs Second quarter gross subscriptions totalled NOK 703 million. Operating earnings ended at NOK -34 million in the quarter. Excluding restructuring costs of NOK 40 million, of which NOK 5 million are tax-related, operating earnings would have ended at NOK 1 million. "We are pleased to see that, excluding restructuring costs, operations are profitable," says CEO Geir Inge Solberg. The change in business model has made it necessary to adjust the organisation considerably. Acta reduced its workforce from 426 to 345 during the quarter. This reduction was mainly carried out in Norway. A similar process will conclude during August in Sweden. A total of approximately 270 people will going forward be working in the Acta Group. This represents a reduction of 37 per cent compared to 31 March figures. The group expects approximately NOK 100 million in reduced yearly costs due to these cuts. Annual fixed and activity-based costs going forward will total approximately NOK 350 million. Acta also has a robust financial position with a net liquidity position of more than NOK 250 million and no interest bearing debt. "We are very pleased that the restructuring of Acta has been successful and that the new organisation is fully operational from 1 August. The implementation of the new service concepts, the restructuring and the cost-saving measures implemented in the period have all been carried out so that the main distribution network is still intact. Acta has a very solid platform for future profitability and growth," says Solberg.
Recurring revenues to cover fixed costs Acta has a strategic goal that recurring revenues shall cover fixed costs. Recurring revenues in the quarter ended at NOK 71 million, while fixed costs ended at NOK 114 million where NOK 28 million relate to restructuring of the organisation. Excluding these restructuring costs, recurring revenues now cover approximately 82 per cent of fixed costs in the quarter. Going forward, recurring revenues will cover fixed costs of slightly below 300 million on a yearly basis. "The implemented restructuring means that the operational risk is significantly reduced which ensures future sustainable profitability", Geir Inge Solberg highlights.
Financial highlights in 2nd quarter 2009
* Gross subscriptions of NOK 703 million, compared with NOK 3,395 million in the same period in 2008.
* Revenues of NOK 132 million, compared with NOK 320 million in the corresponding quarter in 2008.
* Recurring revenues of NOK 71 million, with a coverage factor to fixed costs of 82% ex. restructuring costs.
* Operating result of NOK 1 million excluding restructuring costs and NOK -34 million including restructuring costs, compared with NOK 86 in the same period in 2008.
* Assets under management of NOK 78 billion, compared with NOK 80 billion in the previous quarter.
* The Group has a robust financial position and has a net liquidity position of more than NOK 250 million and no interest bearing debt.
A complete English version of the interim report and the presentation of the 2nd quarter of 2009 are attached on www.newsweb.no and on Acta's Investor Relation web pages www.acta.no.
Contact details:
Geir Inge Solberg, Chief Executive Officer, +47 908 78 043 Christian Tunge, Chief Financial Officer, +47 450 65 850 Rune Wangsmo, Public Relations Director, +47 995 41 507