Countplus merged two member firms and sold three others following its strategic review which also led to the group not paying a dividend for the June 30 quarter.
The firms being sold, Countplus explained, generated an aggregate operating loss of about $160,000 in FY2017. Countplus said any other firms that "offer little or no capacity for strategic value enhancement" will not be a part of the group's two-year renewal, debt reduction and working capital management program.
The diversified financial services firm also said it was in "advanced discussions" with multiple member firms regarding buyback terms and the rollout of the group's direct equity plan. It is also conducting due diligence regarding prospective acquisitions of advice and accounting firms.
"Future acquisitions must fit the company's new disciplined and specific quality framework," Countplus said.
Due to "prudent fiscal management" Countplus exercised over the past six months, the company's debt position has reduced to $11.6 million from $25.4 million. This was driven largely by selling the above member firms as well as nearly all of the company's investment in Class.
As above, Countplus also said it would not be prudent to pay a dividend for the 30 June quarter. This is due to a claim that may be made against wholly-owned subsidiary Total Financial Solutions Australia (TFSA) by clients of a former TFSA adviser who engaged in "inappropriate behaviour."
This has also precipitated Countplus revising its dividend policy: from now on, dividends will now be paid half-yearly rather than quarterly. Future dividends will be declared in the range of 40-70% of maintainable net profit after tax, subject to market conditions and performance.
TFSA has since implemented a governance and compliance review and appointed former Financial Planning Association chief executive Mark Rantall as independent chair and former SMSF Owners' Alliance chair Bruce Foy as an independent director.