Prepared to Grow: Insights from CEO Simon Madder

Prime Financial Group Limited (ASX:PFG) Managing Director, CEO and Chairman of the Board Simon Madder provides an update on the company, discussing the drivers of fiscal 2024 results, the acquisitions of Altor Capital and Equity Plan Management, and the outlook.

Phillipps Abbey: My name is Abbey Phillipps from Finance News Network. Today I have the pleasure of interviewing Simon Madder, Managing Director, CEO and Chairman of Prime Financial. Simon, welcome to the network.

Simon Madder: Thank you for the invitation.

Phillipps Abbey: First, for investors who are not yet interested in Prime Financial (ASX:PFG), could you please give us a brief overview of what it offers?

Simon Madder: Sure. Prime is an advisory, capital management, and asset management firm. We’ve been around for 26 years. We currently manage about $1.2 billion for clients. And we do the best work for really growing companies that are often founder-led, and we do a lot of work with high-net-worth investors.

Phillipps Abbey: Okay. Thanks, Simon. So Prime met fiscal year 2024 guidance and posted 21 percent revenue growth. What was the key driver of that performance?

Simon Madder: I think the good thing about our business is that it’s quite diversified. So we’re in accounting and business advisory, wealth management, corporate finance and also SMSF. And we had a really good mix of input from all four areas. Three in particular really drove the result. So we saw our wealth management business grow by 40 per cent over the year. Our accounting and business advisory, again, grew quite nicely. And also our corporate finance business grew by almost 30 per cent. So we had a good mix across the different areas. I think the thing that’s allowed us to continue to grow the business is that we have about 70 per cent of our revenue as recurring in nature.

Phillipps Abbey: So, Simon, you recently completed the acquisitions of Altor Capital and Equity Plan Management. Can you tell us about those companies and what those acquisitions added to Prime?

Simon Madder: Yes. Absolutely. So Altor Capital is an alternative asset manager. So they do a lot of work in private credit and private equity. That’s important to us because a lot of our clients are looking to access alternatives as well as real estate investments. So having that in-house capability means we can do a couple of things. One, offer a variety of investment opportunities to our wholesale clients. But now we also have another source of funding for our business advisory clients. So we’re acting for about 1,000 companies. And the fact that we now have an in-house capability in that area of ​​fund management where we can help source funding for our clients is pretty unique. So it was important from that standpoint.

As far as EPM, it’s an employee stock plan management and compensation consulting firm. We really like that because they have 80 corporate clients that they work for, where they implement stock plans. Half of those corporates are listed, half are not. We see a really good opportunity to offer other services that we already have to those corporate clients. So it could be a finance function, it could be tax incentives for R&D if they’re developing products, and it could also be M&A services and corporate financing services.

I think the really important thing when we acquire a company is that we look for companies with services that we don’t currently have that we can offer to our customers, and similarly, services that we do have that we can offer to their customers.

Phillipps Abbey: A, Simon, Prime aims to achieve group revenue of $50 million in fiscal 2025, then double that to $100 million three to five years later. How do you plan to get there?

Simon Madder: Yes. So we’ve been really consistent in our organic growth for the last three to four years. So, we’ve been growing at 15 to 20 percent organically, so that should continue in terms of a bridge from $40 million to $50 million. This year, we’re also going to benefit from a full year of investment from both Altor Capital and EPM. So that $40 million to $50 million growth seems pretty reasonable.

In terms of $50 million to $100 million over the next three to five years, we think it’s probably going to be an equal mix of organic growth and acquisitions. We’ve done three acquisitions since October 2022. And we did two in the second half of last year. So we’re starting to get a better rhythm of what we’re doing, and we think there’s an opportunity in the space that we’re operating in, across all four divisions, to actually continue to make acquisitions, intelligently, for the right reasons.

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

Simon Madder: Yeah. So I think, without further ado, it’s more of the same. We’re going to continue to integrate the assets that we’ve acquired. We want to really provide more services to our existing clients, build the brand, do more events, increase awareness of what we’re doing. And really become a destination for these emerging companies, these founder-led companies, and also high-net-worth investors, where we can provide them with a whole bunch of services.

Phillipps Abbey: Simon, thank you for your time.

Simon Madder: I appreciate it.

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