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Link impacted by Brexit and super changes
Major publicly-listed superannuation administrator has issued a trading and earnings update to the Australian Securities Exchange (ASX) pointing to both Brexit and the Australian Government’s recent superannuation legislative changes as being factors in its profit outlook.
The company said that it was expecting full-year operating earnings to be between $350 million and $360 million and operating net profit after tax to be approximately $195 million to $205 million, down from $206.7 million last financial year.
It said the factors influencing the earnings were the lack of finality around Brexit which was impacting business sentiment and the operating performance of Link Group’s European operations.
“The continued uncertainty is contributing to lower levels of business activity, capital markets and share dealing revenues, conversion of new business and revenue growth,” it said. “By way of example, our Link Market Services business in the UK has won a number of IPO mandates that have been subsequently postponed due to Brexit uncertainty.”
On the Australian side of the company’s operations it said the regulatory change associated with the Treasury Laws Amendment (Protecting Your Super Package) Act 2019 was already having an impact in terms of account consolidation initiatives as some funds moved to transfer identified inactive member accounts to eligible rollover funds.
“It is also important to recognise that the scope of regulatory change, member communication programs and adjustments to arrange of fund product offerings has driven increased levels of activity through our organisation,” it said. “To manage this activity, we have supplied our workforce with additional resources to meet the demand.”
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