Sequoia Financial Group Limited (Sequoia, Sequoia Financial Group, ASX: SEQ) is an Australian financial services company providing licencing, wealth management, corporate finance, and legal administration services. The company supports financial advisers, accountants, and investors with tailored solutions across financial planning, SMSF administration, and stockbroking. As of 27 February 2025, Sequoia’s share price was AUD 0.42. The group has undergone a strategic restructuring, divesting non-core businesses to focus on its core service areas, while maintaining strong capital management.
Revenue Decline Driven by Divestments and Market Conditions
Sequoia’s total revenue fell 10.3% to $60.6 million, primarily due to the sale of non-core businesses, including Sequoia Insurance Brokers, Interprac General Insurance, Informed Investor, and Corporate Connect Research. Excluding these divestments, the company’s revenue decline was 3.5% on a like-for-like basis, as weak corporate finance performance offset stronger financial planning revenue.
Operating profit from continuing operations declined 14.6% to $2.7 million, reflecting lower contributions from divested subsidiaries and restructuring costs. The company’s net profit after tax (NPAT) fell 87.1% to $3.6 million, largely due to the prior period benefiting from the one-off gain on the sale of Morrison Securities. Sequoia’s leadership remains confident that the streamlined business model will drive improved profitability moving forward.
Restructuring Focuses on Core Divisions to Drive Efficiency
Sequoia restructured its business into two primary divisions: Licensee & Adviser Services and Legal & Administration Services, simplifying operations and reducing costs. This consolidation is expected to generate annual savings of approximately $1.5 million, primarily from headcount reductions.
Investment in automation and digital tools has improved operational efficiency, particularly in legal document services, enabling faster product rollouts. The company’s strong position in the financial advice sector, where demand continues to grow despite a declining number of registered financial advisers, supports its long-term strategy.
Capital Management Supports Dividends and Future Growth
Despite a profit decline, Sequoia declared a 2.0 cents per share fully franked interim dividend, reflecting a payout ratio of 70%, above the board’s long-term target of 40-60%. The company also completed a 5% share buyback, acquiring shares at an average price of $0.415 per share, highlighting management’s confidence in long-term value creation.
Sequoia maintains a strong balance sheet with $10.9 million in cash reserves and no debt, providing flexibility for strategic investments. The company plans to explore growth opportunities in its core markets, including potential acquisitions and new product expansions.
Positioned for Growth in a Changing Financial Services Market
Sequoia’s streamlined business model positions it for long-term growth as the financial services industry faces increasing demand for advice but a shrinking pool of advisers. The company aims to expand its market share in legal and financial administration services, leveraging technology to enhance efficiency.
Key growth drivers include potential acquisitions, increased demand for financial advice, and efficiency gains from restructuring. Investors will be watching for further operational improvements, strategic partnerships, and revenue growth in core business areas to gauge Sequoia’s success in delivering sustainable long-term returns.
