A Look At Superannuation Stocks – AMP, HUB, SUN, OVH, CGF

Superannuation generally means regular contribution to a fund which helps the individual to accumulate a good amount on retirement. In superannuation, a recurring (installment) payment is made by the employees in order to contribute towards retirement. Employers also contribute to the same investment pool. In the below article we will be discussing about some ASX-listed, major superannuation players, which are performing well in the market and providing decent returns to shareholders.

AMP Limited (ASX: AMP)

ASX-Listed wealth management company AMP Limited (ASX: AMP) primarily provides financial advice and superannuation, retirement income, banking, investment products and life insurance to retail customers.

A Look at Third Quarter Report

In the third quarter of financial year 2019, the company witnessed a growth in assets under management in Australian wealth management, which increased to the amount of A$133.2 billion. The cash outflows of the business stood at A$1.9 billion, which was primarily resulted by

  • Cash inflows of A$7.1 billion, A$0.6 billion higher than Q3 18, with North net cash inflows up 25 per cent to A$1.1 billion.
  • Cash outflows amounting to A$9.0 billion, which included A$0.6 billion in regular pension payments to AMP’s clients and A$0.2 billion due to the introduction of Protecting Your Super legislation.
  • Higher North net cash inflows

Chief Executive of the company stated that AMP Bank has again delivered exceptional value to clients , wherein it witnessed robust growth in deposit of A$0.6 billion and the figure reached to A$14.5 billion, Moreover, the loan book have been surged to A$20.3 billion.

The key management personnel also stated that Australian wealth management is raising significant steps in order to reinvent its business model, building a business around needs of its clients. The following picture depicts an idea of cash flows of Australian wealth management:

At the close of trading session on 8th November 2019, the stock of AMP last traded at $1.945, up 0.258%. The market capitalization of the AMP Limited stands at $6.67 billion as on 8th November 2019. The total shares outstanding of the company stood at 3.44 billion. AMP generated returns of 9.51% and -14.03% during the last three-months and six-months, respectively.

 

HUB24 Limited (ASX: HUB)

HUB24 Limited (ASX: HUB) is engaged in the provisioning of investment as well as  superannuation portfolio administration services. HUB is also involved in the provision of licensee services to financial advisers, software license as well as IT consulting services.

Strong Start to FY20

As per the Annual Report 2019, the company stated that with continued growth in FUA onto the HUB24 investment and superannuation platform as well as continuing success of its supporting businesses, the Group anticipates its financial results to continue improving with scale. Recently, the company through a release dated 11th October 2019 intimated the market about its operational and financial performance for Q1 FY20, which were in line with the expectation of the company:

  • The company stated that it witnessed a YoY growth of 57.3% in fund under administration and the figure reached to $14.4 billion implying the quality of the company’ s products and customer services. The growth in FUA has been fueled by the activation of new advisers from current licensee relationships as well as the broker channel. The continuing flows from established platform users also contributed towards growth in FUA.
  • Taking into account the company’s success in achieving new licensee relationships in FY19, it announced in August its plans to make investment in additional distribution staff in order to leverage the unprecedented market opportunities for rising growth.
  • The net inflows of the quarter stood at $1,238 million, reflecting a growth of 94% against pcp and gross inflows reached to $1,673 million.
  • HUB24 is experiencing benefit from the trend of advisers, which are moving away from institutions; Paragem, wholly owned subsidiary of HUB24 has now wrapped up onboarding of 11 new practices.

At the close of trading session on 8th November 2019, the stock of HUB last traded at $12.550 per share, up 0.16%. HUB generated returns of 13.09% and -13.94% during the last three-months and six-months, respectively.

 

Suncorp Group Limited (ASX: SUN)

Suncorp Group Limited (ASX: SUN) is involved in the provisioning of insurance, banking and wealth products and services to the retail, corporate and commercial customers in ANZ. As per the Annual report 2019, the company stated with its wealth transformational program, which have been embedded throughout its superannuation business, the company has simplified product offering and improved digital experience.

Completion of the Sale

  • The company through a release dated 31st October 2019 announced that it has wrapped up the sale of Capital S.M.A.R.T Group and ACM Parts Pty Ltd to AMA Group, which was announced on 1st October 2019
  • The sale values 100% of Capital S.M.A.R.T at $420 million. SUN received cash consideration of $20 million for sale of ACM Parts, broadly in accordance with book value.
  • In addition, the after-tax profit on the sale is anticipated to be in the ambit of $285-295 million.

The financial performance of the company is defined by the cash earnings of $1,115 million and net profit after tax of $175 million with a declared total ordinary dividend of 78 cents per share in FY19.

At the close of trading session on 8th November 2019, the stock of SUN last traded at $13.340 per share, up 0.603%. SUN generated returns of -0.49% and -2.61% during the last three-months and six-months, respectively.

 

OneVue Holdings Limited (ASX: OVH)

OneVue Holdings Limited (ASX: OVH) is a growth technology business and provided services to superannuation sector.

A look at Recent Quarter (Q1 FY20)

  • Recently, the company has released its results for the quarter ended 30th September 2019 and stated as follows:
  • With respect to Superannuation Member Administration, the number of members reached to 159,063, reflecting a rise of 7.6% against prior corresponding period (pcp). It added that more than 45% of member growth in the quarter was from new funds.
  • As at 30th September 2019, the funds under administration stood at $5.45 billion with a growth of 14.7% on pcp.
  • When it comes to Managed Fund Administration, it witnessed record number of items, which were processed in the Q1 FY20 of 173,687 with a rise of 44% as compared to pcp. The growth was fueled by new funds added as well as continuing growth from existing funds.
  • It was mentioned in the release that the business continues to participate in various new business opportunities, along with a strong pipeline as more fund managers look to outsource fund administration to specialist providers.

At the close of trading session on 8th November 2019, the stock of OVH last traded at $0.395 per share, up 3.947%. The market capitalization of the OVH stands at $101.7 million as on 8th November 2019. The total shares outstanding of the company stood at 267.62 million. OVH generated returns of -14.61% and -14.61% during the last three-month and six-month, respectively.

Challenger Limited (ASX: CGF)

Challenger Limited (ASX: CGF) stands in Australian financial market with the core business in annuities, funds management and administration platform.

Chairman Address

The Chairman of the company recently addressed the shareholders at the 2019 Annual General Meeting and stated:

  • Normalised net profit before tax have witnessed a marginal increase to $548 million, which was in accordance with the revised guidance issued by the company in January.
  • Statutory net profit after tax, which includes valuation changes on Life’s assets and liabilities, declined by $15 million to $308 million.
  • CGF maintains a strong capital position, having $1.4 billion of excess regulatory capital at 30 June 2019. This reflects 53% more than APRA’s minimum requirement.
  • In Funds Management segment, the performance of the company was impacted by lower performance fees, which declined by $16 million.

At the close of trading session on 8th November 2019, the stock of CGF last traded at $8.070 per share, up 0.498%. The market capitalization of the CGF Limited stands at $4.91 billion as on 8th November 2019. The total shares outstanding of the company stood at 611.96 million. CGF generated returns of 22.22% and 2.95% during the last three-months and six-months, respectively


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