In the AGM of Hub24 Limited (ASX: HUB) held on 19 November 2018, the managing director of the company addresses about the business highlights, its financial results, the market and growth opportunities of the company, the outlook of the company and few other additional information to its investors. In the business highlights the managing director of the company tried to highlight that the company has total funds under administration (FUA) worth $8.3 billion. It reached $9.1 billion by the end of its Q1, 2019. There was a net cash flow of $2.4 billion for the entire FY2018. In Q1 2019, there was a net cash flow of $638 million.
The managing director also highlights the group financial results for FY2018. The revenue of the company increased by 36% and it reached $84 million. The gross profit of the company increased by 65% and reached $34.3 million. The underlying EBITDA also increased by 123% and it was reported to be $11.4 million. The underlying net profit after tax also increased by 129% which was reported to be $5.4 million. The operating cash flow got increased by 201% which was around $12.2 million. The company at last also declared the inaugural dividend of 3.5 cents to its investors.
The platform segment results of FY18 showed an increase in the FUA as well as revenue due to continuous investment and solid execution while delivering expanding profit margins. There was an increase in the revenue by 51% as a result of the net inflow of cash through the broadening of the client base and the distribution footprint. As a result of increased scale, an increase in the gross profit margin was also observed. The operating expenses increase by 45% as a result of investment to support accelerating growth. A continuous growth in EBITDA is seen as a result of an increase in the scale.
An overview of the key trends shaping the industry was also highlighted. There are around $809 billion funds in the Australian platform market. It is projected that by 2026, these funds will further go up and reach $1.55 trillion. In the coming 10 years of time, the funds from the Superannuation pool in Australia will reach $4 trillion and is expected to reach by $9.5 trillion by 2035. The net inflow through the platform was 49% in 2018 which went to the non-aligned platform. Also, both Stockbrokers and financial advisers managed the direct investment. It is estimated that by 2020, the managed account industry will have funds around $115 billion.
From the company’s point of view, they are continuously making efforts to meet the requirements of the market. The company has a strong faith in their commitments towards their customers. The innovation and the service which they provide to the customers are building their biggest strength. The company was recognized as the provider of the leading platform in the managed account space. The company always put efforts to deliver more. It works on enhancing the platform functionality by introducing foreign currency assets. They further manage the portfolio functionality as well as expand their investment menu.
At HUB24, the customers are given innovative solutions to enhance their wealth by connecting the customers to the brokers who help them to grow their business. They also support the wealth management licenses by connecting them and create values. They also provide investors, the right solution to the wealth needs. Advisors are provided with the freedom to choose their preferred investment options. Investment professional are also benefitted as they have access to new distribution channels and innovative technology to execute their investment strategies.
Since morning there is an increase in the market price of the share by 4.057% and is currently trading at A$13.85 with the market capitalization of $825.6 million and PE ratio 108.48x.
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