Bell Financial forecasts lower profits after sluggish end to 2021

Shares in the owner of Bell Potter Securities dived nearly 6 per cent on Thursday after the company forecasted a collapse in profits following a weak end to 2021.

Bell Financial Group has reported lower profits for 2021.

Listed stockbroker and financial advice provider Bell Financial is forecasts lower profits when it releases its annual results in February, following a sluggish end to 2021.

The Sydney-based firm expects to report a profit of $44m for the full year ended December 31, down from the $46.7m it made in the 2020 financial year.

Unaudited results released on Thursday for the owner of the Bell Potter Securities group show revenue fell to $292m for the 12 months, from $299m in the previous corresponding period.

The results are a stark contrast to what the stockbroker reported to investors at the Bell Potter Emerging Leaders Conference in September. The company reported at the time its unaudited net profit for the eight months to August 31 was $27.3m – 16.2 per cent ahead of the previous corresponding period. Revenue was also up 7.8 per cent on 2020 to $190.6m.

Arnie Selvarajah is an executive at Bell Potter, which is owned by Bell Financial Group. Picture: John Feder.

Bell’s profit downgrade sparked a mass sell-off among investors on the ASX on Thursday, with shares in Bell Financial down 5.9 per cent to $1.76 – the lowest in a month.

After Thursday’s slump, the broker’s share price is 2.5 per cent lower than the same period last year.

Bell Financial was founded in 1970 by Colin Bell as a commodities trading business. It claims to service 600,000 clients with funds under advice exceeding $63.9bn.

The company said revenue in its technology & platforms and products & services businesses grew by about 10 per cent on the previous year to $66m, with profit after tax up 10 per cent to $15m.

“The growth in these divisions can be directly attributed to our ongoing investment in leading edge technology through the development of proprietary systems and platforms, and suite of products and services,” Bell said.

Morningstar Quantitative upgraded its outlook for Bell Financial on Wednesday from “fairly valued” to undervalued.