HUB24 Limited (ASX: HUB), headquartered in Sydney, together with its subsidiaries, offers solutions for the financial services industry in Australia and links advisers to their clients through the HUB24 platform.
It is primarily focussed on the growth of its wholly owned subsidiaries Paragem Pty Ltd, a financial advice licensee, and Agility Applications Pty Ltd and ConnectHUB Pty Ltd which provide data, reporting and software services to Australian stockbroking and wealth management market.
Today, HUB24 reported reasonably good results for the March 2019 quarter reflecting a continued growth trajectory.
The net inflows were posted at $ 793 million, up 33.3% on the prior corresponding period (pcp) and gross inflows at $ 1.2 billion, up 40.9% on pcp, both being records for a March quarter despite a challenging climate and industry-wide structural change.
Besides, the company’s Funds under Administration (FUA) were $ 11.5 billion as of March 31st, 2019, up 55.7% as compared to March 2018.
According to the latest available data from Strategic Insights, HUB24 achieved 1st place for quarterly net inflows and moved up to 2nd place on an annual basis. Besides, it also maintained the highest growth rate relative to its size in the industry.
As per the business update, HUB24 successfully secured new relationships including 78 new advisers across multiple practices that began using the platform, and 19 new licensee agreements were signed during the quarter. Moreover, the company’s robust pipeline demonstrates further growth opportunities. The company continued to offer the HUB24 platform to the stockbroking market and also launched a non-custody solution for a Melbourne based private wealth and advisory firm.
The platform investment menu continued to expand with the addition of 17 new managed portfolios during the quarter including both diversified and Australian equity portfolios and several ETFs listed in the United States. In the next quarter, the company plans to launch the availability of Challenger annuities via the HUB24 platform and the innovation is based on the ConnectHUB technology which is currently in pilot with several licensees.
Also, during the last three months, Paragem recruited a new practice and Agility Applications and successfully implemented the OpenMarkets application and infrastructure solutions in March. The business is working on Machine Learning / Artificial Intelligence services and is currently piloting these with a stockbroking client.
For the half-year ended December 31st, 2019 (1HFY19), the company recorded the underlying net profit after tax (NPAT) of $ 3.1 million (up 46% on 1HFY18) from an underlying EBITDA of $ 6.5 million (up 32% on 1HFY18). The FUAs increased by 46% to $ 10.0 billion, and the Group set a new record for net funds flow of $ 2.1 billion as of December 31st, 2018.
HUB24’s current market cap stands at AUD 923.1 million with ~ 62.33 million outstanding shares. ECP Asset Management Pty Ltd and UBS Group AG recently became substantial shareholders in the company upon purchase of 3,351,141 (5.38% voting power) and 4,102,249 (6.58% voting power) ordinary fully paid shares respectively.
On Thursday, April 18th (03:52 PM AEST), the HUB stock price closed at AUD 14.560, down 1.7% with ~ 552,577 shares traded. HUB’s YTD return also stands positive at 27.56% so far.
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