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Praemium Records Second Highest Quarterly Inflows

Praemium Records Second Highest Quarterly Inflows
Funds under administration (FUA) of the SMA platform have grown 27% in FY16, to $4.8 billion.
Jul 15, 2016 By Ben Khouri Tags: PPS

Financial services firm Praemium Ltd (ASX:PPS) has reported its second highest quarterly inflows on record. Gross platform and managed fund flows grew to $432 million, a 33% increase to the previous quarter.

Praemium Records 12% Increase in International Inflows

Australian businesses contributed $313 million to the inflows. The remaining $119 million in international inflows represents a 12% increase to the previous quarter. In defiance of the persistent volatility in European markets, inflows have been maintained, due to a diversified global client base, with assets from its new ‘Smartfund 80% Protected Funds’ reaching £60 million at the end of FY16, a 43% increase to the March quarter.

Despite its consistent performance in the wake of market volatility, Praemium’s CEO Michael Ohanessian discussed the potential ramifications of the Brexit on their performance: “The recent depreciation of the GBP (UK Sterling) will Praemium in two ways. The first impact is GBP-held foreign currency will be reported at a lower value in $AUD, resulting in unrealised foreign exchange losses. The second impact will be to reduce operating losses reported in $AUD. Based on UK Results in GBP (Pre-Audit) for FY16, revenue growth was 66%, while expenses were 20%, highlighting the improving financial trend as the UK business approaches profitability.”

Additionally, funds under administration (FUA) of the SMA platform have grown 27% in FY16, to $4.8 billion. Moreover, FUA for the Australian business grew 26% for FY16, to $3 billion, with FUA for the international business growing 30%, to £923 million (A$1.76 billion).

Growth in SMA Platform

Within Australia, 38 new firms signed up to the Praemium SMA (Separately Managed Account) platform in FY16, contributing to 18%of total asset inflows for the financial year. Praemium expects to an increase in fund growth, with several new dealer groups in the process of utilizing Praemium’s SMA platform.

Praemium Sign up JBWere

Late last month, Praemium announced that they had executed an agreement with JBWere, an Australian and New-Zealand based private wealth management business.

Under the agreement, which has a potential value of approximately $1 million a year, will see JBWere gradually roll-out the Praemium solution for all wealth management client portfolios.

Praemium’s CEO was quite optimistic about the deal: “We are delighted to be partnering with an iconic financial firm like JBWere. This is a tremendous validation of the robustness and breadth of our administration and reporting technology.” 
As at 10.58am (AEDT), PPS is up almost 3%, to $0.345.

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Ben Khouri Author: Ben Khouri Jul 15, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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