Managed Accounts Holdings Limited (ASX:MGP) has increased its Funds Under Administration (FUA) by $181m to $1.5bn in total. The report to the ASX said the company was on track to reach its FUA targets of $1.56bn by 30 June 2015. The “continued strong growth momentum” was partially due to an extended pipeline of new licensees. The company is projecting that these new licensees will likely lead to a record number Memoranda of Understanding (MoU) executions in the June quarter. The board members of Managed Account Holdings said current upward momentum was likely to continue and that the current FUA position gives the board members “comfort” about future prospects.
The new licensees will be offered customised building and implementation of Managed Account services through the company. Before the new service is built and before the company collects fees, a MoU is executed with each new licensee. After the service is implemented, Managed Account Holdings will earn administration and transaction fees. The report said the company is achieving growth through both organic leads in existing licensees and new acquisitions starting to be implemented, including MyPlanner Australia which was implemented during the quarter. Eleven potential licensees were cited in the December 2014 quarterly update, of which two have executed a MoU. The company expects several others to execute by the June quarter. Although earnings guidance is on track, the company has cited the correlation between its transactional revenue streams to the equities market. Volatility in the equities market will likely correlate to volatility in revenue streams.
Shares of MGP are flat around 12:48pm on Monday. MGP is up 2.56 per cent in the last 12 months and 11.11 per cent so far this year.
Author: Simon Herrmann
Apr 20, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.