Netwealth profits bolstered by platform revenue boost

Netwealth has published its results for the first half of the 2023 financial year (1H23), reporting an underlying net profit after tax (NPAR) of $30.6 million, up 11.4 per cent from $27.5 million in the previous corresponding period.

The result was supported by 18 per cent growth in platform revenue, from $84.6 million to $99.8 million over the same period.

The group’s total operating income rose 18.8 per cent, from $86.5 million in 1H22 to $102.8 million in 1H23.

The income boost was offset by a 27.2 per cent increase in total operating expenses, from $44.5 million to $56.6 million.

Netwealth also reported 10.2 per cent growth in funds under administration (FUA), up from $55.6 billion to $62.4 billion.

This was despite a surge in net outflows, up  47.1 per cent from $2.5 billion in 1H22 to $3.7 billion in 1H23 — offset by a 13.9 per cent increase in FUA inflows to $8.7 billion.

As a result, net flows were down 32 per cent to $5 billion.

Growth in Netwealth’s total funds under management (FUM) were also weighed down by a 30.8 per cent contraction in net inflows to $1.2 billion.

Total FUM grew 4.5 per cent relative to 1H22, closing 1H23 at approximately $14.4 billion.  

Netwealth has maintained its net inflows guidance for FY23 at $11 billion, subject to “timing of transitions” and “no further deterioration” in the macro and geopolitical environment.

“After a period of increased investment in our people, resources, and technology, our focus is now and driving productivity, efficiency, and operating leverage, which are important for ensuring sustainable growth and profitability,” Netwealth noted.

Netwealth is expecting its non-headcount expenses for 2H23 to remain in line with its 1H23 result, and is forecasting further employee growth over the period.