Hub24 (ASX: HUB) has announced record inflows for its June 2020 quarter as well as FY20. Annual net inflows was $4.95 billion, up 27%.
What is Hub24?
Hub24 (ASX: HUB) is an Australian financial technology business that creates portfolio management and Superannuation software. Founded in 2007, you can think of Hub24’s software as a way to better manage investments in shares and other assets. HUB24 has a management team with decades of experience within the wealth management industry and in the development of platforms.
Hub24’s June 2020 update
Hub24 announced that funds under administration (FUA) reached $17.2 billion, an increase of 34% despite the negative market movement impact of $0.6 billion in the year. As I mentioned, the annual net inflow of $4.95 billion was a record and it was 27% higher than last time.
The FUA increase for the June 2020 quarter was $2.1 billion, which included positive market movements of $1 billion. The June quarter saw record net inflows of $1.1 billion, this was up 11% on the prior corresponding period.
The financial technology company said that momentum built during the quarter after a weak April due to COVID-19. Advisers adjusted to the new environment. Inflows were driven by client transitions from existing platforms with important wins from key accounts and broker clients.
Hub24 said that its new business pipeline is growing with 34 new licensee agreements signed during the quarter, including a new large national licensee.
According to the latest available strategic insights for the Australian platform market, Hub24 has maintained second place for both quarterly and annual net inflows. Its market share has grown from 1.3% to 1.9% from March 2019.
Hub24 Managing Director Andrew Alcock said: “We remain committed to delivering the highest levels of service to support advisers and their clients as they seek to meet their objectives. We would like to thank our customers and our staff for their continued support during this challenging environment.”
Summary
The company continues to grow its FUA, which is a key aspect for earnings growth. And earnings are important for growth of the share price. Hub24 is winning in the right areas. I’m not sure if it’s a buy today because it has a very high price/earnings ratio. I’d leave it on the watchlist for a cheaper price – perhaps under $10.
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