Praemium has posted a record underlying half-year EBITDA of $11.4 million for the six months to 31 December 2022, a 52 per cent increase on the same period a year earlier.
In its half-year results released on Monday, the firm also reported that its funds under administration (FUA) rose by 6 cent compared to the six months to 30 June 2022 to $42.7 billion.
Net inflows of $1.0 billion were 35 per cent higher than the previous six months and, alongside positive equity market valuations and improved cash administration fee contribution, were said to have provided strong top line momentum.
Continuing business revenue grew by 17 per cent versus a year earlier to $35.4 million. Praemium stated that this was augmented by disciplined cost constraint in a highly inflationary environment but exacerbated by tight labour availability and high workforce mobility.
Meanwhile, costs increased by 6 per cent compared to a year earlier to $24.1 million. Praemium’s statutory net profit after tax was $9.1 million, up from a loss of $2.6 million in the previous corresponding period.
“The 2023 financial half-year has seen key strategic decisions pay off with increased profitability and enhanced shareholder returns,” commented Praemium chief executive officer and executive director Anthony Wamsteker.
“This result, derived from strong net funds flow, margin expansion, and discipline on costs, has delivered a step change improvement in operating leverage. We are very grateful to our outstanding people for their ongoing effort and its positive impact.”
Praemium’s SMA saw “continued exceptional growth”, according to the firm, generating $670 million in net flows with $9.0 billion in FUA, up 11 per cent on the previous half.
A total of $346 million in net flows was recorded for Powerwrap, with a 5 per cent increase in FUA to $12.0 billion, while the FUA for VMAAS was reported to be $21.8 billion.
Seventy-seven per cent of Praemium’s FUA was attributed to advisers with a tenure of between five and 10 years and a further 10 per cent to advisers with a tenure of 10 years or more.
Additionally, 9 per cent of FUA was attributed to advisers with a tenure of between one and five years and 4 per cent to advisers with a tenure of less than one year.
The firm also reported platform revenue margin of 26 basis points (bps), an increase of 4 bps, while EBITDA margin of 32.1 per cent was up by 7.2 per cent.
The sale of Praemium’s international operations to Morningstar was successfully completed on 30 June 2022. Praemium noted that $32.4 million has been returned to shareholders from this sale, with $25.8 million in dividends paid during the half.
This divestment, according to the firm, has allowed it to focus its financial and leadership resources on the domestic market, particularly regarding its efforts to evolve its platform solutions for advisers.
The firm has also kicked off a $25 million share buyback, with $6.6 million deployed during the most recent half year.