Praemium (ASX: PPS) expects new product launch to boost market share growth

4 min read | December 19, 2023 02:39 PM AEDT | By Team Kalkine Media

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Praemium (ASX: PPS) expects new product launch to boost market share growth — Image source: Atstock Productions

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Highlights

Praemium provides portfolio administration, financial planning tools and investment platforms to the wealth management industry

In 1QFY24, the company registered an 8% YoY surge in FUA to AUD 44.6 billion

The Vanguard Group Inc has the maximum stake in the company with the shareholding of nearly 2.67%

Praemium Limited (ASX:PPS) is an ASX-listed software and services company, which offers portfolio administration, financial planning tools and investment platforms to the wealth management industry. The company provides virtual managed accounts and financial planning software licenses and administers the Australian managed account platform.

Financial performance

In the first quarter of the financial year 2024 (1QFY24), the company recorded an 8% YoY increase in the funds under administration (FUA) to AUD 44.6 billion, backed by over 69% (over previous quarter) increase in net inflows to AUD 206 million. During the quarter, the company introduced several improvements in its platform to enhance customer experience.

In FY23, the company registered a 19.45% YoY rise in revenue to AUD 76 million, underpinned by a 20.26% increase in platform revenue and an 8.52% jump in portfolio service revenue. Underlying EBITDA surged by 22.59% to AUD 23.42 million and statutory NPAT increased by 307.26% to AUD 15.15 million, during the reported period.

Top 10 shareholders of PPS

The top 10 shareholders of PPS have around 15.03% shareholding in the company, while the top four have nearly 8.66% shareholding. The top two shareholders of PPS are the Vanguard Group Inc. and Stammer (Donald William Ph.D.), with a shareholding of ~2.67% and ~2.31%, respectively.

Recent business update

On19 December 2023), the company shared via an ASX-filing that it had bought back 270,800 shares from the market. During the ongoing buy back period, the company intends to buy back a maximum of 50,181,521 shares.

On 22 November 2023, the company released the results of the 2023 annual general meeting. In the AGM, all three resolutions were approved by shareholders with the desired percentage of votes.

Outlook

In the first half of FY24, the company expects its EBITDA to be less than 1HFY23 by around 20% due to change program implemented by the new management. The change program is expected to bring in long-term benefits.

Development of PPS’s next generation IDPS is on track and launch is expected to take place in the 1HFY24. This product is expected to complement the SMA and Powerwrap schemes and complete the platform range. Moreover, this is anticipated to boost the company’s growth rate in market share.

Share performance of PPS

PPS shares closed 2.53% higher at AUD 0.405 apiece on 19 December 2023. Including this, the share price has witnessed a drop of nearly 50% in the last one year and recorded a fall of 36.22% in the last three months.

The 52-week high of PPS is AUD 0.86, recorded on 2 March 2023 and the 52-week low is AUD 0.35, recorded on 23 November 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 19 December 2023. The reference data in this report has been partly sourced from EODHD/Others.

Disclaimer

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