Sequoia Financial Group reports robust FY25 growth with improved margins and a fully franked dividend, while navigating regulatory scrutiny and governance reforms.
- FY25 revenue rises to $124 million with EBITDA near $10 million
- Legal Documents division achieves over 40% margin
- New AFSL Governance Committee established for enhanced oversight
- ASIC investigation ongoing into InterPrac-related failed funds
- Board renewal underway with independent directors to be appointed
Strong Financial Performance in FY25
Sequoia Financial Group Ltd (ASX, SEQ) has announced unaudited results for the 2025 financial year, highlighting a marked improvement in its second half. The group posted total revenue of $124 million, driven primarily by its Licensee Services and Legal Documents divisions. EBITDA rose to $9.9 million, reflecting margin expansion to just under 8%, a notable improvement from previous periods.
The Legal Documents division stood out with a margin exceeding 40%, underscoring its growing contribution to the group’s profitability. Meanwhile, Licensee Services improved its margin from 5.0% to 8.4%, supported by positive investment portfolio returns. These results underpin the board’s decision to declare a fully franked final dividend of 2.0 cents per share, bringing the total FY25 dividend to 4.0 cents per share.
Governance Enhancements and Regulatory Challenges
In a bid to strengthen oversight, Sequoia has established a dedicated AFSL Governance Committee chaired by an independent industry expert. This committee oversees the compliance and risk management of Sequoia’s licensed subsidiaries, including InterPrac Financial Planning, Sequoia Wealth Management, and Sequoia Asset Management. The move aims to balance robust governance with operational flexibility across the group’s financial services licenses.
However, regulatory headwinds persist. InterPrac Financial Planning remains under investigation by ASIC concerning the failed Shield Master Fund and First Guardian Master Fund. Complaints lodged with the Australian Financial Complaints Authority (AFCA) relate to approximately $22 million in superannuation investments. While these complaints are at an early stage, the ultimate financial impact remains uncertain, contingent on AFCA’s determinations, recoveries from receiverships, and insurance coverage.
Client Support and Board Renewal
Recognising the distress caused to affected clients, InterPrac has mobilised a dedicated team of salaried advisers to provide guidance and support. A client information package is also being prepared to clarify ongoing efforts in collaboration with regulators and superannuation bodies.
On the governance front, Sequoia is actively renewing its board following the retirement of Charles Sweeney. The company is finalising appointments of independent directors with expertise in financial advice, funds management, banking, legal, and ASX governance. These appointments are expected to be completed ahead of the full-year results release on 28 August 2025 and the upcoming annual general meeting.
Shareholder Movements and Market Activity
Sequoia also addressed unusual trading activity in late July, linked to Australian Wealth Advisors Group Limited (AWAG) reducing its voting rights from 15.23% to 11.91%. While the identity of the ultimate beneficial owners behind these changes remains unclear, the company reaffirmed its commitment to ASX compliance and transparency.
Overall, Sequoia’s FY25 update paints a picture of a company balancing solid financial growth with the complexities of regulatory scrutiny and governance reform, positioning itself for a potentially transformative year ahead.
Bottom Line?
Sequoia’s strong financial footing and governance upgrades set the stage, but regulatory uncertainties warrant close investor attention.
Questions in the middle?
- How will the ASIC investigation and AFCA complaints ultimately impact Sequoia’s financials?
- What specific expertise will the new independent directors bring to the board?
- Could further shareholder movements affect Sequoia’s market stability?