Legacy Claims and Impairments Cloud Sequoia’s Strong EBITDA Growth and APAC Expansion

Robust Operating Performance Despite Sector Challenges

Sequoia Financial Group Ltd (ASX, SEQ) has revealed a solid underlying operating performance for the year to date through November 2025, with EBITDA rising approximately 15% compared to the prior corresponding period. This growth is particularly notable given the headwinds faced in its Licensee and Adviser Services Division, which has struggled amid challenging market conditions.

The Legal and Administration Services division has been a standout contributor, delivering an EBITDA of $1.86 million year-to-date, up from $1.55 million previously. Meanwhile, the Licensee and Adviser Services division also improved, posting $1.65 million compared to $1.26 million in the prior period. These results exclude head office costs and non-operating expenses, underscoring the core business strength.

Legacy Issues and Financial Discipline

Sequoia has settled a longstanding claim related to the now-defunct Libertas Financial Planning business for $0.98 million. This settlement, tied to advice matters predating Sequoia’s acquisition of Libertas, will be recorded as a non-operating expense in the first half of fiscal 2026. To prevent similar legacy risks, the Group has enhanced its risk management and compliance frameworks, particularly within its Licensee and Adviser Services Division.

In addition to this settlement, Sequoia anticipates several non-cash impairments and provisions in the upcoming half-year results. These include potential claims under professional indemnity insurance and impairments of intangible assets related to the Licensee and Adviser Services Division. Importantly, these impairments are non-cash and will not impact the Group’s operating cash flow or the ongoing performance of its core units.

General Insurance Sale and Financial Impact

The Group will also recognize a non-cash impairment of up to $2.2 million linked to contractual adjustments from the sale of its General Insurance businesses. While the maximum consideration under the sale agreement was $4.8 million, Sequoia expects to receive a final payment between $0.6 million and $0.9 million, in addition to the $2 million already received. This shortfall reflects the financial performance hurdles embedded in the sale terms.

Strategic Growth via APAC Expansion

Looking ahead, Sequoia’s recently announced expansion into the Asia-Pacific (APAC) region is gaining significant traction. This strategy, focused on Corporate Finance and Salary Advice businesses, aims to offset structural challenges domestically and unlock long-term growth opportunities. Early momentum suggests this could be a meaningful driver for the Group’s future performance.

A comprehensive financial update, including finalized impairment figures and detailed performance metrics, will be provided with the Group’s half-year results in February 2026, offering investors greater clarity on the full impact of these developments.