Key facts about Centrepoint Alliance's announcement

Centrepoint Alliance (ASX:CAF) has announced that it will not make any additional payment to Financial Advice Matters Group Pty Ltd (FAM) shareholders, following the company's acquisition. The decision comes after FAM's EBIT contribution fell short of the target, resulting in a one-off profit increase for Centrepoint Alliance.

Overview of Centrepoint Alliance's acquisition update

Centrepoint Alliance Limited, a financial service provider, highlighted the performance-based earnout clause related to its acquisition of Financial Advice Matters Group Pty Ltd. The acquisition, initially announced in November 2023, included a clause requiring a minimum EBIT of $1.5 million for additional payments. However, FAM achieved an EBIT of $1.1 million, falling short of the target. As a result, Centrepoint Alliance will not issue further payments and will release provisions set aside for this, leading to a $1.3 million profit increase before tax in the first half of 2025. The company continues to focus on its core business lines, enhancing profitability and operational efficiency.

Executive commentary on performance-based earnout clause

The actual unaudited EBIT achieved was $1.1 million. Consequently, Centrepoint Alliance will not pay any additional consideration to FAM shareholders. This decision will allow the company to release previously allocated payment provisions, resulting in a one-off profit increase of $1.3 million before tax in the first half of the fiscal year 2025.