Praemium grows FUA to $16bn

Praemium’s Australian platform experienced a 24 per cent increase in FUA to $6.9 billion from net inflows of $1 billion. Australian revenue increased 14 per cent over financial year 2019 to $31.4 million. Australian EBITDA increased 21 per cent to $15.2 million, compared to $12.4 million for FY18. EBITDA margins were 48 per cent of revenue, up from the prior year’s 45 per cent.

Praemium’s International platform recorded gross inflows of $850 million, up 62 per cent in the prior comparable period, while FUA closed at $2.6 billion as at 30 June 2019, up 29 per cent for the year.

However, the group’s international revenue based on its business units in the UK and Asia declined by 12 per cent for the year to $13.7 million.

“The UK business was impacted by declines in global equity markets and outflows in the Smartfund range of managed funds,” the company said in a statement. “This was offset by growth in Asia for WealthCraft’s CRM and planning software, with revenue increasing 19 per cent to $0.8 million from a 33 per cent uplift in users over the past 12 months.

In the 12 months to 30 June Praemium accelerated its development of a range of products and technology solutions and capitalised $4.7 million during the year to expand its platform offering.

In February the ASX-listed group released its next-generation integrated managed accounts platform to the market. 

In Australia, the VMA administration service (VMAAS), which was launched in the previous financial year, attracted over 4,000 portfolios representing $6.6 billion in funds under administration. In addition to the $9.5 billion on the custodial platform, Praemium can now report overall FUA of $16.1 billion, an increase of 108 per cent over the previous year.

“The past year was a transformative one for Praemium. We believe February’s upgrade to a full-service integrated managed accounts platform represents the fifth generation in platform technology,” Praemium CEO Michael Ohanessian said.

“An important consequence of this upgrade is a significant increase in the size of Praemium’s addressable market. In Australia alone, our market has expanded from the $21 billion SMA platform segment (as at end 2018) to the $858 billion overall platform market. Although it is early days, we are very encouraged by the strong client interest in Australia and internationally for our new IMA capability.

“I’m delighted to say that our international business is now growing strongly and is on target to become profitable next year.”

Praemium delivered a record $521 million of inflows in the second half versus $328 million in the first. 

“Comparing this year to the previous year, gross inflows were up 62 per cent and I’m pleased to say that momentum has continued into the current financial year,” Mr Ohanessian said.

“While our new integrated managed accounts platform is a great achievement, there remain many things for us to do. Our next major program will be to fully integrate the platform and our WealthCraft CRM and financial planning system. With the combined global reach of our platform and WealthCraft, we believe our unique position will deliver us a competitive advantage that will also help support adviser firms in their efforts to deliver excellence in their management of client wealth.”