Positive Solutions posts profit for 2011
‘Honest housekeeping’ and a focus on delivering value for money has helped the Aegon-owned Positive Solutions to make a profit in 2011, Peter Coleman has said.
As the firm announced its unaudited results for the year end, the chief executive of Positive Solutions claimed that a “root and branch” review of expenditure, combined with a focus on improving the proposition for its partners, enabled the firm to produce its £0.2m pre-tax profit.
According to the results, seen by Financial Adviser, the national IFA has tightened up its costs, with its loss before tax shrinking from £2.1m in 2010 to £360,000 in 2011.
Its cash and short-term deposit base has also risen, from £11.65m in 2010, to £11.95m in 2011, helping to produce a gross profit of £15.28m.
The gross profit is slightly down on 2010’s figure of £15.79m, but presented as a percentage of turnover, the 2011 results show a considerable improvement thanks to strict cost controls. As a percentage of turnover, the gross profit is 19 per cent, compared with 18.2 per cent for the previous year.
Net current assets are £18m, with a ‘significant’ capital excess, and an average production per adviser growth figure of roughly 20 per cent, which Positive Solutions expects to continue to rise in the future.
Mr Coleman said: “When I joined the business 18 months ago we were making losses in the region of £10m. This was unsustainable. So we set about correcting this, implementing a four-step plan.”
1) To ensure the regulatory position is rock solid. Mr Coleman said: “From our perspective, our relationship with the regulator is as strong as it can be.”
2) To ensure financial health. He said: “We put together a profit transformation plan, improving governance and making sure that we treat the money Positive Solutions spend as if it is our own money and that of our advisers: carefully.”
Over the past 18 months, the national IFA has made 25 people redundant - which equates to roughly 20 per cent of the work force. It also closed some less well-populated offices and ensured some debts were repaid, as well as renegotiating utility and IT expenditure.
3) To concentrate on the proposition. Mr Coleman said: “We have to make sure that we treat our partners as customers - what can we do that will help them? We have been working hard to ensure we and our partners are retail distribution ready, making it easier for them to write business.”
4) To outline drivers for growth. He cited spending time, money and resources in making sure that the proposition was right so that Positive Solutions advisers will continue being successful in the new RDR world.
Mr Coleman added: “RDR affects everybody and although it is the biggest change in our industry for a generation, we are well prepared for the RDR.”
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