Financial Players with significant increase in FUM – NWL, IFL

Financial Players with significant increase in FUM – NWL, IFL

Achieving financial independence and securing retirement saving goals via disciplined portfolio management, investment in super annulation/managed funds and guidance/support of specialist wealth managers is critically important.

Seeking advise from independent researchers can be a step towards gaining specialist assistance in managing wealth and growing it over near future. Adopting the approach to finance assistance via online approach can assist the investors to manage wide array of domestic as well as international products.

Let’s zoom our lens on two financial player offering specialised financial assistance to investors - NWL and IFL.

While considering the platform providers by FUA market share, the two players - NWL and IFL contributes 2.9 percent and 4.4 percent respectively, as on September 2019.

NWL’s FUA increased by 50.2 percent for CY2019

Founded in 1999, Netwealth Group Limited (ASX: NWL) is a wealth management company based out of Australia. NWL is a technology company with a superannuation fund and it invests, protects and manages the wealth of investors.

 

 

NWL was ASX-listed on 20 November 2017 and since 23 September 2019, the Company is included in the S&P ASX 200 index.  On 18 February 2020, the Company released its first half year financial year 2020 results for the period ended 31 December’ 2019.

Half Yearly Funds update (for period ended at 31 December 2019):

  • Fund under Administration (FUA)
    • FUA was noted at $28.5 billion, representing an increase of 22.2 percent or $5.2 billion for 1H 2020.
    • For CY 2019, there was a growth of $9.5 billion or 50.2 percent.

 

  • Funds under Management (FUM)
    • FUM was $5.7 billion; grew by 45.7 percent or $1.8 billion for 1H 2020.
    • For CY 2019, FUM increased by 83.2 percent.

Fully franked Dividend distribution:

  • The dividend distribution amounted to 6.9 cents per share, fully franked.
  • The dividend is payable to its shareholders on 26 March 2020 with the record date of the dividend distribution as 26 February 2020.

Significant increase in income:

  • Total revenue was $ 58.7 million, an increase of 21.7 percent or $10.4 million on pcp.
  • Company’s total revenue grew at a CAGR of 26 percent (1H2017 – 1H2019).
  • Underlying EBITDA increased by 22.8 percent or $5.7 million, from $ 24.8 million pcp to $30.5 million.

Moreover, the headcount increased by 60, from 246 in 1H2019 to 306 in 1H 2020. Also, the Company expects to increase its IT headcount to 108 by 30 June 2020.

Outlook for FY 2020:

  • Revenue and Underlying EBITDA to lie in the range of $120 to $122 million and $61 to $63 million, respectively.
  • Subject to timing of client transitions, the full year FUA net inflows is forecasted as $9 billion.

With the accelerated growth, Netwealth maintains its efficiency and scalability by investing in distribution teams and technology. As the Company’s investment in technology, several hybrid scrum teams are established in Vietnam and Melbourne. As an outcome of tech capability, there is more than 35 percent of cost reduction per scrum team.

Stock performance:

On 20 February 2020, the stock of NWL closed at $ 8.54, an increase of 2.28 percent compared to the previous closing price. The company has outstanding shares of around 237.69 million and a market capitalisation of nearly $ 1.84 billion.

The stock has delivered a positive return of ~16 percent and 6.37 percent in the last six months and last one year, respectively. 

 

IFL’s FUMA increased by 5.2% for 1H20

ASX-listed financial provider, IOOF Holdings Limited (ASX: IFL) helps customers to secure their financial future. The company provides Financial Advice, Investment Management products and services for Portfolio & Estate Administration. 

IFL was founded in 1846 and have offices in Adelaide, Auckland, Brisbane, Hobart, Melbourne, Perth and Sydney. IOOF employs around 2,000 people and serves to nearly 500,000 number of customers.

Director’s Retirement from the Board:

On 19 February 2020, the Company notified the market that Ms Jane Harvey had retired from the Company’s Board; however, she will remain as a director on several IOOF subsidiaries board.

IOOF recently released its first half year financial year 2020 results for the period ended 31 December’ 2019.

FUMA as on Half Year Ended 31 December 2019:

  • Funds under Management, Advice and Administration (FUMA) was noted at $145.7 billion, an increase of 5.2 percent or $7.2 billion compared to 30 June 2019.

Fully franked Dividend distribution:

  • The dividend distribution amounted to 16 cents per share (fully franked) with the payout ratio of 92 percent.
  • The record date of the dividend distribution is 26 February 2020, with the payment date of 16 March 2020.

Increase of Net inflows:

  • Revenue from continuing shareholder activities grew by 4 percent pcp to $527.2 million.
  • Going in line with guidance, UNPAT from continuing operations was $56.6 million.
  • Statutory net profit after tax was $115.0 million due to substantial profit on sale of Ord Minnett.
  • Company’s net inflows were $1.4 billion, including, the Advice of $985 million and Portfolio & Estate Administration net inflows of $756 million. This increase accounts to the strong flows via Shadforth Portfolio Service, eXpand launch and extension of ClientFirst operating model.
  • Also, it is noted that the net inflows during the second quarter of 1H FY20 is the highest since the June 2018 quarter.

Stock performance:

On 20 February 2020, the stock of IFL closed at $7.090, up by 1.73 percent as compared to the previous closing price. The company has outstanding shares of around 351.08 million and a market capitalisation of nearly $ 2.45 billion.

The stock has delivered a positive return of 35.64 percent and 14.31 percent in the last six months and last one year, respectively.


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