Netwealth Group Limited (ASX: NWL)

NWL Details

Launching of new Products: Netwealth is a financial service company that offers a range of innovative portfolio administration, superannuation, retirement, investment and managed accounts solutions to investors and non-institutional intermediaries. The Group disclosed its interest to the ASX Limited in accordance with the deed poll that was executed by the Company and Netwealth Investment Limited and was in favour of the Australian Securities and Investment Commission and pursuant to ASIC Instrument. The Company and its controlled entities had a power (as on 30 April 2018) to control the voting or to dispose of 2,666,724 voting shares in the Company and they had a net economic exposure to zero shares in the Company. It was reported that Funds under Management at 31 March 2018 were $16 billion and net funds flow for the quarter were $879 million but the market movement was negative $307 million which resulted in an increase of 4 per cent for the quarter and 48 per cent for 12 months. It was observed that Michael Heine, the founder and joint managing director of the Company will debut on Financial Review List and will be on the list of 16 new billionaires in Australia.Moreover, while the banking services are under the observations by Royal Commission, it is to be seen that how the operations at Netwealth are impacted.
 

Growth in FUA and FUM (Source: Company Reports)

Despite of the seasonally slower January month, the Company delivered strong results. Moreover, the Netwealth Managed Account ($1.6 billion) grew by 231 per cent for the past 12 months. The Company was awarded with few titles like it won the Best Platform overall for 2017 by Investment Trends and the Investment Platform Innovator for the year. The Group launched new platform functionality that completely focussed on improving its efficiency of the advice process and by increasing the client engagement. It will continue to expand its Retail and Private Label Managed Account Service. It recently sold the majority of the assets and liabilities of Bridgeport Financial Services Pty Ltd and the IPO Prospectus disclosed the proposed sale of the majority of the assets and liabilities of Pathway. Since the start of the year, the share prices climbed up by 32.08 per cent and was up by 35.82 per cent in last three months. The stock was up by 3.53 per cent in last five days (as at 25 May 2018). The stock is trading at a higher PE level as compared to the industry and is edging towards its 52-week highest price. The stock looks “Expensive” at the current market price of $9.33, given the trading levels.
 

NWL Daily Chart (Source: Thomson Reuters)
 

IOOF Holdings Limited (ASX: IFL)

IFL Details

Positive net inflow of Funds under Management:IOOF has been helping Australians to secure their financial future since 1846. During that time, it has grown substantially to become one of the largest groups in the financial services industry. It provides Financial Advice and Distribution services, Platform Management and Administration services and provides Investment Management products. IOOF Holdings, a substantial holder of the Integral Diagnostics Limited changed its substantial holding on 22 May 2018 and now it holds 7.302 per cent of the voting power from 6.208 per cent. The Company got a threat from a class of shareholders. The Company received a ruling from the Federal Court that it mustdisclose all the documents that are relevant to allegations of misconduct that were involved in an alleged frontrunning scandal. After the integration with the Australia and New Zealand Banking Group’s wealth-management business, IOOF will be second-largest licensee -owner.


Funds Under Segment Performance (Source: Company Reports)

This integration was under the observation of Royal Commission but any which ways IOOF had assured that it will bear any kind of liabilities arising after the acquisition of ANZ Wealth. The Group achieved positive net flows of $1.0 billion in funds under management, administration and advice (FUMA) for the third quarter of the 2018 financial year.  Advice flows were $736 million for the quarter (pcp: $545 million, up 35 per cent). IOOF also recorded a 21st consecutive quarter of positive platform net inflows with $346 million (pcp: $306 million, up 13 per cent). Organic growth remains a key part of its advice-led strategy. The Group’s advice and platform businesses have demonstrated another quarter of strong organic growth. All regulatory hurdles to the completion of the ANZ Wealth Management acquisition have been favourably resolved. The stock was down by 17.43 per cent in the past six months and declined by 1.84 per cent in the past one week. The stock witnessed a recovery of 1.1 per cent as on 25 May 2018. We give a “Hold” recommendation at the current market price of $ 9.15 given the improvement in funds under management and the impact of the integration with ANZ.
 

IFL Daily Chart (Source: Thomson Reuters)
 

Axsesstoday Limited (ASX: AXL)

AXL Details

Implementation of the Securitisation programme- Axsesstoday Limited, a specialist provider of equipment funding solutions for small to medium sized enterprises (SMEs) in the hospitality, transport and other sectors recently announced that the $200 million Securitisation Warehouse Facility (“SWF”) established to support the Company’s rapid growth across the hospitality and transport segments is now operational. On 30 April 2018, the Company placed over $150 million in receivables into the SWF, which is expected to reduce funding costs, improve capital efficiency and underpin further market share gains. Macquarie Bank Limited will be the provider of the SWF. SWF has a revolving term of 12 months and has $200 million in senior bank funding provided by Macquarie. Lately, the Company refinanced its corporate debt facility limit from $175 million to the targeted level of $65 million and is reducing its reliance on bank loans.


Loan Receivable Growth (Source: Company Reports)

The Group has continued to achieve strong growth since commencing operations in 2012 by providing a compelling and differentiated value proposition for merchants to offer equipment finance to their end customers. A successful implementation of the Securitisation programme demonstrated the company’s ability to execute major strategic initiatives which will deliver increased, sustainable shareholder value. Pendal Group Limited became the substantial holder of the Group since 30 April 2018 by holding 3,260,864 shares and 5 per cent of the voting power in the Company. Axsesstoday has built its business by offering an alternative for small businesses. The Group assesses small businesses by using algorithms and modelling that is specifically developed for the hospitality and transport sectors. The stock was up by 28.3 per cent in the past six months and declined by 3.32 per cent in the past five days. The stock experienced a recovery of 7.8 per cent as on 25 May 2018. We give a “Hold” recommendation at the current market price of $ 2.2 by looking at the future growth prospects and sustainable performance, while Royal Commission is not expected to impact the group as such.
 

AXL Daily Chart (Source: Thomson Reuters)

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