The Share Price Of NWL Tumbled By 9.542% After The December 2018 Quarter Business Update

On 25 January 2019, Netwealth Group Ltd (ASX:NWL), a company from the diversified financial sector which provides superannuation and non-superannuation platform products to financial intermediaries and clients announced its December 2018 quarter business update.

During the December 2018 quarter ending on 31 December 2018, the company reports a small fall in the fund under administration by $0.3 billion which is equivalent to 1.5%. The company also highlights in Q2, the net cash inflow through the fund under administration during the period was $876 million due to adverse market movement.

As compared to December 2017, there was an increase in the fund under administration by 23%, i.e. it increased by $3.6 billion. However, the cash inflow through FUA in this quarter was less than its previous quarter. But the company is confident about the strong growth in the future as a result of significant changes in the competitors and industries. Â

In the recent industry event along with the Royal Commission hearing pushed the advisers to review their platform strategies. The company states that during the December 2018 quarter, the pricing, technology and the servicing strategy remains successful, where many advisers selected Netwealth’s platform as their preferred platform. Based on these data, the company expects that in the calendar year 2019, there will be a transition of a new set of clients that will help in creating opportunities for the companies.

In September 2018, NWL was successful in achieving the highest flows as per Strategic insights quarterly platform market update where there was a cash inflow of $4.4 billion which is 51.4% of the total platform market flows.

For the remaining part of FY2019, the company has plans to enhance its platform and service through the addition of Challenger annuities to the platform. The company will further launch the cash management and transactional capabilities that will allow sophisticated options to manage the cash. The platform will have features for new multi-asset transaction that will facilitate trade, switch and rebalance all assets including domestic and international equities, managed funds, term deposits, managed account models and cash in one transaction.

NWL also has plans to introduce additional new model, strategies, and functionality for their retail and private label managed account.

The official listing date of NWL is 20 November 2017 where the overall performance of NWL was 52.66%. NWL’s last one-year performance was 24.37%.

As per the annual report of NWL, the company made a profit of $20.818 million where the earnings per share were 8.96 cents. The balance sheet of NWL appears healthy with a net asset base of $67.412 million and a PE ratio of 0.17 indicating a stable financial position to handle its long-term debts. The status of total current asset and total current liabilities states that the company can efficiently manage its working capital and short-term debt.

By the end of the FY2018 on 30 June 2018, NWL had net cash and cash equivalent worth $52.669 million.

By the end of the trading on 25 January 2019, the closing price of the share was A$7.300 which was 0.770 points below its previous trading day’s closing price with the market capitalization of A$1.92 billion and PE ratio 90.07x.

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