Skandia takes $6.5 million loss on the chin

Skandia’s Australian operation is on track to achieving a cash-flow positive or break-even result in 2006 despite recording a $6.5 million pre-tax loss in 2005, according to the group’s Australian CEO, Ross Laidlaw.

Laidlaw said Skandia Australia produced “only a small after-tax loss” last year, which was in “accordance with the business plan”. As well Skandia experienced a 4 per cent drop in gross flows to its platform, down to $1.25 billion in 2005 versus $1.3 billion in 2004. However, Laidlaw said the first quarter of 2006 has seen Skandia rebound in the Australian market with flows up 10 per cent compared to the same time last year with overall funds under administration now sitting at about $4 billion. “There’s been a renewal in support for Skandia this year,” he said. According to Laidlaw, the group has invested heavily in staff and services in a bid to carve out a place as an independent platform provider in a very competitive market. “We’ve suffered some growing pains,” he said. “But we’ve invested and now we are ready to reap the rewards.” Laidlaw said Skandia Australia is projected to produce revenue of $30 million this year. Skandia will add more funds to its platform in May this year including absolute return products, a China fund and a blended property fund. As well, upgrades to its allocated pension reporting system are due soon. Laidlaw said the group is also planning improvements to its back-office systems under the supervision of its new chief operating officer, Mark Papendieck – the former head of Avanteos. Skandia’s new owner, the South African financial services giant Old Mutual, is in the process of delisting its Swedish acquisition which it finally secured in February this year after a protracted and bitter takeover campaign. “Old Mutual has seen what we’re doing [in Australia] and are happy with it and keen to help us grow,” Laidlaw said.