Praemium Limited

Constant Growth in FUA: Praemium Ltd (ASX: PPS) provides online portfolio administration services in Australia. The Company has also developed technology for the operation and maintenance of separately managed accounts. the Company has declared via a release that they have garnered gross inflows amounting to $645 Mn for the quarter ended September 2018. Inflows from Australia accounted for $ 466 Mn while the rest was from the International markets. Also, the FUA (Funds under administration) increased by 29% over the period of past 12 Months to reach at $8.6 Bn. These growths in inflows was on the back of an increasingly improving pensions footprint, wherein the Australian retail superannuation footprint has exceeded the $1Bn mark with a growth of 43% over the past 12 months. Also, the international business in terms of pension schemes doubled during the same period.

Going further, the company has plans to evolve from the SMA into a fully comprehensive Managed Accounts Platform. In conjunction with this, the company is developing an emphatic adviser portal to ensure that clients get a better experience overall. The firm’s “Smartfund Range of Products” has been approved for distribution in the UAE by the Mashreq Bank as the initial promoter and launch of the product is expected in late 2018.
 

Increasing Inflow Momentum and Accelerating FUA (Source: Company Reports)

Meanwhile, the share price has receded by 5.63% in the past six months as at November 27, 2018 and traded at higher PE multiple of 191.43x. Considering the exponential growth in the FUA & the evolving superannuation footprints, we maintain our “Hold” recommendation on the stock at the current market price of $0.670.
 
 

OneVue Holdings Limited

Decent Q1 FY19 Performance Across All Segments:OneVue Holdings Limited (ASX: OVH) is a small cap wealth management company with the market capitalization of circa $150.67 Mn as of November 28, 2018. It is in the business of offering end-to-end superannuation solutions that include the provision of investment and portfolio administration, tax and reporting services. The company operates through three main business segments i.e., Fund Services, Platform Services, and Superannuation Trustee Services which accounted revenue around 50%, 37%, and 13%, respectively in FY18 of total revenue. Recently, the company released its Quarterly key business measure update for the quarter ended 30 September 2018 wherein the Fund Services Managed Funds Administration grew by 15.2% on Q-o-Q basis and 63.4% on PCP basis while managed fund administration funds under administration (FUA) was slightly down in Q1 FY19 as compared to the prior corresponding period (PCP) and closed at $491.6 Bn. This was slightly down because of market conditions and fund movements during the period.

Moreover, the company Superannuation Member Administration Services had reported an FUA of $4.75 Bn, exhibiting decent growth of 8.7% on Q-o-Q basis and 123% rise on the PCP basis. This growth was accelerated by recently acquired KPMG Superannuation Administration (KPMG) business and its existing clients which added new 44,257 members during the quarter as compared to the prior quarter. This growth was also growing by added two new funds during the quarter taking the total number of superannuation funds administered to 40. Platform Services retail FUA recorded at $4.56 Bn as at 30 September 2018, showing 4.0% growth on a Q-o-Q basis and 7.3% on PCP basis. Gross quarterly inflows for September 2018 from new and existing clients of $312.3 Mn were up by 3.6% on Q-o-Q basis, further building on the strong momentum and taking gross inflows to $1.4 Bn for the last 12 months. On Superannuation Trustee Services segment front, the company had reported a Funds under trusteeship (FUT) of 12.1 Bn, showing 5.4% rise on Q-o-Q basis and 24.6% rise on PCP basis. It was mainly driven by the rise of assets of its new and existing clients during the period. As of now, the group is doing well and becomes a market leader in independent outsourced unit registry solutions, which ensure that the company has a decent outlook ahead. 

 

September 2018 Quarterly key business measures update (Source: Company Reports) 

On the analysis front, the company recorded FY18 Net margin of 14.5% which is broadly in-line with the industry median of 14.7%, showing the efficiency of the company in converting the revenue to profit. Over the past two years, the group has also generated a positive return of shareholder’s fund with ROE at 8.1%, higher than the previous year of 0.3%. Meanwhile, the stock has fallen 31.74% in the last six months but up by 10.65 % in the past one month. Therefore, we maintain our “Hold” recommendation at the current market price of $0.590 by looking at the performance of the Group (up 3.509% on 28 November 2018). 
 

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