SelfWealth Limited (ASX: SWF) is a provider of benchmarking tools. The clients can compare their portfolio with the other investors in the community based on performance, safety rating and WealthCheck Scores.
The company today, on 29th April 2019, published its business update. The group has released Q3 FY19 Quarterly Cash Flow Report, which is evidence that the company has continued to move on the planned path of reducing operating expenses and increasing operating revenue.
The company currently offers a $9.50 flat-fee ASX brokerage service as well as integrated, unique data-driven investment portfolio solutions, powered by a large group of Australia’s self-directed investment community.
The operating revenue of the company was up 41.7% for the quarter. The trade volume growth for the quarter was 29.6%. The total trades for the quarter increased to 44,048, driving trading revenue for the company.
The increase in trading volumes came from new and existing users, with new clients continuing to grow steadily month-on-month, despite a reduction in the advertising spend. The advertising spend will continue to drop on the back of optimised digital campaigns to improve the efficiency of customer acquisition and functions being brought in-house.
The new client numbers increased quarter-on-quarter, crossing the 10,000 mark early in the quarter and finishing at 11,565, an increase of 23.4% on the previous quarter’s total of 9,369. This growth represents 15% of new and churning investors across the industry, according to Investment Trends' reporting.
Interest generated from client cash balances remained one of the key revenue drivers. It has followed the increase in trades, with a jump of 22.9% in client cash balances from $61 million to $75 million.
The growth in these vital revenue drivers has had the natural flow-on effect to operating revenue, which has increased to $740,000 in Q3 FY19, up from $522,000 in the prior quarter. The cash burn is down to $821,000 for the quarter along with the decrease in expenditure.
The total funds under administration is an indication of the value of assets on HIN, as well as cash held by clients, that are using the SelfWealth platform for their investments. This has continued to grow steadily in line with the acquisition and is ready to cross the $1 billion mark, however, recorded $972 million at the end of March. This includes $897 million in holdings under HIN and $75 million in client cash.
The company reported a cash outflow from operations of $821,000 for the quarter ended 31 March 2019, with financing cash inflow of ~$1.26 million. The cash and cash equivalents at the end of the quarter, however, stood at ~$2.93 million.
On the price-performance front, the stock of SelfWealth Limited was trading at $0.130, up by ~18.182% during the day’s trade (on 29 April 2019 AEST 02:30 PM). The stock has generated a significant YTD return of 59.42% and returns of 23.39%, 77.42% and 57.14% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at $0.163, and 52-week low price stands at $0.056, with an average trading volume of 315,528.
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