Yellow Brick Road (YBR) has reported a 10.6% rise in premium under management to $18.2 million for last financial year.

Underlying funds under management grew 31.7% to almost $1.5 billion.

YBR’s growing wealth business includes financial advice, life insurance products, investments and superannuation.

“The fundamentals of the business are good,” Chairman Mark Bouris said.

The wealth arm earned about $10.62 million in revenue, up from $10.42 million the previous year, taking the group’s total revenue to $230.7 million, up 4%.

But the group reported a net loss of $700,000, caused in part by a $5.1 million reduction in contribution from non-cash revenue.

The YBR board has recommended shareholders reject the “grossly inadequate” takeover bid from Mercantile OFM, which has a 19.97% stake in the company.

Mercantile is offering nine cents per share in cash for the stock it does not own.

“Mercantile’s inadequate and opportunistic takeover bid would deprive YBR shareholders of the full strategic value of their investment,” Mr Bouris says in the letter to shareholders.

“The price of YBR shares… has traded consistently higher than Mercantile’s offer price since the takeover bid was announced.”