Stocks In Financial Planning Platform- HUB24, AUB

Stocks In Financial Planning Platform- HUB24, AUB

The financial planning platform connects financial advisors, investment managers and retirement professionals to provide specialised services to their clients through innovative platform solutions. Let’s learn about Australia’s two leading financial planning platforms.

HUB24 Limited (ASX: HUB)

HUB24 finishes the financial year 2019 with the record Net Inflows of $3.9 billion, up 60.6% on the previous corresponding period.

Ranked No.1 for adviser primary platform advocacy, HUB24 has achieved 54.3% growth in Funds Under Administration to $12.9 billion as at 30 June 2019. The quarterly performance of the group returned the record Net Inflow of $979 million in June Quarter that is equivalent to the Gross Inflow of $1.5 billion.

HUB24 platform connects advisers and their clients through innovative solutions in the financial services industry. Its flexible technology has established a market-leading investment and superannuation platform that allows advisers and licensees to customise their solution to fit their individual business.

(Source: Company Presentation)

 

The market leading platform of HUB24 stands out in Australian market for its fastest growth and the 2nd highest net inflows in the industry, both, quarterly and annual, as per the latest available data of Strategic Insights. Advisers using the HUB24 platform grew 32.4% to 1,625 as at 30 June 2019 compared to FY18. As a result, HUB24 increased its platform market share from 0.9% to 1.3% over the period of 12 months to 31 March 2019.

HUB24’s growth in FUA outlines the rise in organic opportunities through the launch of new platforms and agreements with two large national advice groups, Madison Financial Group and Centrepoint Alliance. The company also experienced transition opportunities of attractive ~725 million from other platforms with clients and advisers seeking to derive benefit from the use of HUB24 platform.

Investment Trends released their latest Planner Technology report during the quarter in which HUB24’s platform ranked in the top 2 places for 23 out of 32 categories and ranked in first place for its range of investments, client portal, portfolio management tools and for helping advisers to demonstrate value to their clients.

Quarterly Progress of HUB24 (Source: Company Announcement)

In April this year, HUB24 launched an annuity planning platform, Challenger, to allow advisers to now seamlessly manage and transact annuities through HUB24 platform desktop. Challenger annuities also enables client to view their annuities alongside other assets in their portfolio.

HUB also expanded its managed portfolio menu, with 21 new portfolios on the platform launched in June quarter. As per the company’s information, 6 of these new portfolios were made for specific advice groups while the entire launch includes a combination of global and Australian equities.

The company has also enriched its international managed portfolio solution with the development of foreign currency capability completed in June, thereby reflecting the significant enhancement to company’s already market leading functionality. The investment managers using HUB24 platform now are able to improve portfolio performance by reducing foreign exchange costs when transacting international assets in their managed portfolios.

On the front of investment portfolio, HUB24 increased its menu to now include 50 international listed ETFs, which significantly improves access to international markets for advisers and their clients when combined with HUB24’s new foreign currency capability.

Moreover, the company’s commitment to provide investment solutions for all segments of the market has resulted in the launch of the Sargon Small APRA Fund Service. This innovation provides a solution for self-managed superannuation fund (SMSF) clients seeking the flexibility of their own fund whilst utilising the services of a professional trustee.

Cashwerkz, which provides a comprehensive menu of products from leading banks, has agreed to integrate its term deposit and cash management platform into HUB24’s subsidiary Agility Applications. The move is expected to enhance the utility of Agility’s stockbroker software solution.

On the news of record annual and quarter inflows, HUB stock price soared 3.894% to close at $11.740 on 16 July 2019. The price to earnings multiple stood at 83.640x with a market capitalisation of $704.32 million.

Over the past 12 months, the stock has shown a negative performance change of 7.06% include a plunge of 22.44% in the past three months.

Also Read: HUB24 March Quarter Results

AUB Group Limited (ASX: AUB)

AUB Group decided to end its ties with IBNA in the partnership of AIMS joint venture, which has been serving to negotiate capacity with carriers and coordinate conferences for broker members.

On 26th June 2019, AUB Group and IBNA have mutually agreed to end the existing relationship within the joint venture through a phased exit of IBNA from AIMS. The decision was reportedly driven by the diverging requirements between the two member groups on the future direction of the partnership.

The outcome is aligned with AUB Group’s evolving strategic agenda to increase direct influence with carriers. AUB Group expects to now better leverage its scale, footprint, capability and expertise to drive improved capacity and product innovation. More importantly, the decision is expected to have no impact on Fiscal 2020 results and even could provide the opportunity to enhance the run-rate earnings on future years, stated AUB.

Established in 2007, AIMS was a joint venture between IBNA, a non-equity insurance broker network, and Austbrokers, AUB Group’s equity-based Australian insurance broker network, focused to source capacity and offerings while working for the collective benefit of all its broker members.

Financial Performance of AUB:

Australasia’s largest equity-based insurance broker network, AUB Group Limited reported strong revenue and profit growth in its Insurance Broking and Underwriting Agencies business in Australia and New Zealand. Its Adjusted Net Profit After Tax grew 1.8% to $17.0 million, including costs linked to the Austbrokers Canberra fraud of $1.6 million.

Snapshot of AUB 1HFY19 Financial Performance (Source: Company Presentation)

AUB Group CEO and Managing Director, Mark Searles stated that the growth in these two segments has been driven by a combination of organic growth and anticipated premium rate increases, together with increased cross collaboration across AUB’s businesses.

However, the positive returns from Insurance Broking and Underwriting Agencies’ segments were utilised in the short-term impact of the NSW workers compensation as well as the planned investment costs in Risk Services.

AUB’s reported Net Profit After Tax (NPAT) declined 16.5% to $19.8 million in 1H19, compared to $23.8 million in 1H18. The fall was reportedly driven by the adjustments to carrying value of investments and other non-cash accounting adjustments with respect to acquisition and mergers. The Board still declared a fully franked interim dividend of 13.5 cents per share in line with the dividend paid in the previous corresponding period.

AUB recently announced the appointment of new Chief Executive Officer and Managing Director for the group.

Outlook:

AUB remains focused on driving organic growth through its acquisition driven strategy. Further, the group stays committed to its client-focused strategy and continues to investigate acquisitions and start-up investment opportunities.

Stock Performance:

AUB shares edged up by 1.357% to last trade at $11.200 on 16 July 2019. The price to earnings multiple stood at 16.800x with a market capitalisation of $812.21 million.

Over the past 12 months, the stock has declined by 16.78% including a negative price change of 13.67% in the past three months. In the recent past one month, AUB shares registered an upside of 4.34%.


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