Prime Financial Group Ltd grew revenue by 22% to $60.5 million in FY26, driven by acquisitions and core business expansion. However, net profit after tax fell 15%, impacted by a higher tax rate and elevated operating costs.
- 22% revenue increase to $60.5 million
- Underlying EBITDA up 18% to $13.9 million
- Net profit after tax down 15% due to 30% tax rate
- Final fully franked dividend increased 3% to 0.92 cents
- Strategic acquisitions and client divestments reshape portfolio
Revenue Growth Outpaces Profit Decline Amid Tax Hike
Prime Financial Group Ltd (ASX:PFG) posted a solid 22% jump in revenue to $60.5 million for the year ended 30 June 2026, underpinned by strong organic growth in its Wealth segment and strategic acquisitions. Yet, despite this topline momentum, net profit after tax attributable to members slipped 15% to $3.9 million, primarily due to an increase in the company tax rate from 25% to 30% and higher operating expenses including acquisition and restructuring costs.
The company’s underlying EBITDA rose 18% to $13.9 million, maintaining a steady margin of 24%. Operating cash flow surged 47% to $4.3 million, reflecting improved earnings quality and cash conversion. Earnings per share (EPS) declined 20% to 1.49 cents, but adjusted for the tax rate change, EPS would have increased 5% to 1.96 cents.
Strategic Acquisitions and Portfolio Rationalisation
Prime continued its M&A activity in FY26 with the acquisition of two client bases across its Wealth and Business segments, adding approximately $1.7 million in annualised revenue. The largest recent acquisition, Lincoln Indicators, completed in May 2025, was fully integrated during the year, expanding Prime’s access to high-net-worth and wholesale investors and enhancing its managed solutions capabilities.
In parallel, Prime divested several client portfolios that did not align with its ideal client profile, generating $4.9 million in revenue divestments. These moves reflect a deliberate strategy to focus on scalable, recurring revenue streams and deepen integration across services.
Focus on Mid-Market and Technology Enablement
Prime’s Managing Director and Chairman Simon Madder emphasised the company’s focus on the mid-market, where its integrated advice and investment model can make the greatest impact. The firm is prioritising simplification, technology enablement, and disciplined M&A to build a connected ecosystem of advice, products, and services.
Operationally, Prime accelerated investments in enterprise systems and data consolidation, aiming to automate workflows and leverage AI to improve client service and scalability. The company reported a 21% increase in recurring revenue from existing clients, now representing 85% of total revenue, up from 70% in FY25.
Balance Sheet and Dividend Update
Prime’s balance sheet remains robust with net assets of $61.2 million and net debt increasing to $20.6 million from $14.9 million a year earlier, reflecting acquisition payments and increased borrowings. The group’s debt to underlying EBITDA ratio stood at 1.5 times, within its target gearing range.
The board declared a fully franked final dividend of 0.92 cents per share, up 3%, bringing total dividends for FY26 to 1.72 cents per share, a 4% increase on FY25. The dividend reinvestment plan remains available for the final dividend, payable on 28 September 2026.
Outlook and Growth Priorities
Looking ahead, Prime aims to grow revenue to $100 million by FY28–FY30, focusing on margin expansion and earnings quality. Management highlighted continued organic growth in core Wealth, SMSF, and Accounting services, complemented by selective acqui-hires and disciplined acquisitions.
The company expects efficiency improvements from workflow automation and AI acceleration to support margin gains in FY27. However, with the tax rate hike and elevated integration costs weighing on short-term profitability, investors will be watching how Prime balances growth with cost control and capital management.
Bottom Line?
Prime’s FY26 results underscore the challenge of balancing strong revenue growth with profitability pressures from tax changes and integration costs, setting the stage for a critical test of operational leverage and margin improvement in FY27.
Questions in the middle?
- How effectively can Prime translate its recurring revenue growth into sustained margin expansion?
- What impact will ongoing acquisitions and divestments have on Prime’s earnings quality and integration risk?
- Can Prime’s technology investments and simplification initiatives accelerate scalability and client retention?