Ioof Plumps For Strategic Alliance

The Age

Thursday August 28, 2008

By Vanessa O'Shaughnessy, Investment Reporter

IOOF has reported a small increase in net profit despite funds under management and administration falling more than 15%.

The Melbourne-based financial services company also acquired a 13% stake in hard-hit property and funds management company MacarthurCook for $4 million.

Shares in MacarthurCook, which has lost three-quarters of its value this year, jumped 4.6% on the news, closing at 80.

But investors cut 19, or 3.1%, from IOOF's stock, despite the result being only slightly below analysts' expectations. It closed at $5.87.

Last financial year, IOOF had $34.8 million under management and administration. This year, it has $29.4 million.

Dividends also declined. Last year, the company paid a total dividend of 33. This year, the total dividend will be 30, with a 15 payment per share due on October 10.

Revenue fell 15.5% to $404.1million. Net profit, though, rose 4.5% to $23.3 million, helped along by the adoption of International Financial Reporting Standards.

Goldman Sachs JBWere analysts had predicted a full-year net profit of $25.3 million.

The MacarthurCook share placement and "strategic alliance" yesterday received support from more than 94% of shareholders who voted at the company's extraordinary meeting.

The vote means IOOF will hold 3.45 million shares in MacarthurCook, which has market capitalisation of $21.5million.