Prime’s Ambitious Growth Strategy Faces Integration and Margin Challenges Ahead
Prime Financial Group Ltd reported robust FY25 results, driven by a 21% revenue increase and key acquisitions that expanded its client base and funds under management. The company’s strategic focus on M&A, technology, and mid-market opportunities sets the stage for ambitious future growth.
- 21% revenue growth to $49.4 million in FY25
- 17% increase in underlying EBITDA to $11.9 million
- 37% rise in earnings per share to 1.87 cents
- Acquisition of Lincoln Indicators and three others added 3,300 high net worth clients
- Funds under management surged 58% to $1.9 billion
Strong Financial Performance
Prime Financial Group Ltd delivered a compelling set of full-year results for FY25, showcasing a 21% jump in total revenue to $49.4 million. Underlying EBITDA rose 17% to $11.9 million, while reported earnings per share climbed 37% to 1.87 cents. The company’s disciplined approach to growth and cost management kept labour costs steady at 55% of revenue, maintaining a healthy EBITDA margin of 24%.
These results reflect Prime’s successful execution of its growth strategy, combining organic expansion with targeted acquisitions. The company’s net debt to EBITDA ratio improved to 1.3 times, supported by an upgraded $41 million funding facility with Westpac, enhancing its financial flexibility to pursue further growth opportunities.
Acquisitions Fuel Expansion
FY25 saw Prime complete four acquisitions, including the significant purchase of Lincoln Indicators, which brought in 3,300 new high net worth clients and $600 million in funds under management. This acquisition notably expanded Prime’s wealth research and subscription services, as well as its managed funds offerings.
Prime’s acquisition strategy is designed to be earnings per share accretive, with a typical deal structure involving a mix of cash and shares, fostering an ownership mentality among acquired teams. This approach has helped the company build scale and diversify its service capabilities across wealth management, business advisory, and alternative asset management.
Technology and Mid-Market Focus
Prime is investing heavily in technology to drive efficiency and scalability. A full technology review has prioritized data consolidation, a group-wide customer relationship management system, and piloting artificial intelligence initiatives. The acquisition of Lincoln Indicators also supports a more unified and scalable investment platform.
The company continues to target the mid-market segment, where it sees significant opportunity given the rising affluence in Australia and the growing demand for professional advice among high net worth individuals and business owners. Prime’s integrated service model, branded as ‘OneConnected,’ aims to cross-sell and deepen client relationships across its diversified offerings.
Looking Ahead
Prime has set ambitious targets to double revenue to $100 million within three to five years and achieve a 30% underlying EBITDA margin by FY28-30. This growth will be driven by a blend of organic initiatives, further acquisitions, and continued investment in technology and people. The company’s culture of ownership, with 46% of shares held by staff and associates, underpins its collaborative growth strategy.
With a strong balance sheet, expanding client base, and a clear strategic roadmap, Prime Financial Group is well-positioned to capitalize on the wealth transfer and business succession trends shaping the Australian financial services landscape.
Bottom Line?
Prime’s FY25 results mark a pivotal step towards its $100 million revenue goal, but integration and technology execution will be key to sustaining momentum.
Questions in the middle?
- How will Prime manage integration risks from multiple acquisitions to maintain growth quality?
- What impact will AI and technology investments have on operational efficiency and client experience?
- Can Prime sustain its EBITDA margin while aggressively pursuing scale and market share?
