Venn Brown sat down with Simon Madder, CEO of Prime Financial, to discuss the business’s outlook, financial performance, staffing challenges and growth strategies.

Company overview: Prime Financial is an advice, capital and asset management firm. With 160 staff, the company has four main business lines:

   1.     wealth management

   2.     accounting & business advisory;

   3.     capital & corporate finance capital; and

   4.     self managed super funds (SMSF).

The business turned over $34 million in revenue in FY23 and has around $1.1 billion of client funds under advisement.

Focus on organic growth: Prime has an impressive history of delivering top-line growth of ~20%. Growth has primarily been achieved organically by growing its client base in conjunction with its share of wallet from existing clients.

Investing for growth: Prime has historically delivered EBITDA margins of around 30%. This dropped to 26% in FY23 as the business grew staffing to position it to deliver future growth. Long term, management expects margins to return to the 30% range as it focuses on expanding its higher-margin business lines.

Staff retention: As is the story across financial services, staff retention is an ongoing challenge. Prime reports that turnover is below the industry average, with the accounting business seeing the biggest turnover. Management reports that 45% of the company is owned by staff, which helps with retention and attracting new talent. Prime uses a combination of on- and off-shore staff to better manage its cost base.

Ambitious but achievable growth targets: Prime is targeting FY25 revenue of $50 million, doubling to $100 million 3-5 years beyond that. Management expects growth to be largely organic and a combination of new and existing customers from across all business lines. With a payout ratio of around 70%, this growth should continue the dividend growth of the last few years, which has averaged almost 50% a year since FY20.