Netwealth boasts strong profits in ‘milestone year’

In an announcement to the ASX, Netwealth reported a 21.6 per cent increase in revenue from the 2022 financial year to FY23, up $38.1 million to $214.7 million. Platform revenue comprised the majority of the figure at $207 million, up $34.1 million, or 19.8 per cent, over FY22.

The underlying EBITDA was $100.7 million, representing an 18.4 per cent increase over FY22’s $85.1 million, while its statutory net profit after tax (NPAT) was $67.2 million, up $11.6 million or 20.9 per cent on FY2022.

In a joint announcement, Netwealth chief executive and managing director Matthew Heine and chair Timothy Antonie said it was a record year for the company.

“The Australian wealth management market is estimated to have slightly declined in the 12 months to March 2023 from $1,002 billion to $982 billion. Net inflows over this same period were $14.2 billion, a substantial reduction compared to $29.3 billion over the previous corresponding period,” Mr Heine and Mr Antonie said.

“This decrease is believed to be primarily due to investors seeking the safety of cash and term deposits off platform and delayed transitions.

“FY2023 was another milestone year for Netwealth across many financial and operating metrics.

“Despite the very challenging backdrop, Netwealth’s Funds Under Administration (FUA) grew by 26.3 per cent or $14.6 billion to reach an all-time high of $70.3 billion as at 30 June 2023. Netwealth delivered record annual gross inflows of $18.7 billion and pleasingly, net inflows of $9.9 billion.”

The total FUA net inflows figure of $9.9 billion for FY2023 represented a decrease of $3.1 billion to FY2022, which Netwealth attributed to clients partially withdrawing funds to invest in off-platform investments including term deposits and other alternative investments; and large partial withdrawals for high-net-worth and large accounts.

Netwealth also reported a managed account balance of $13.6 billion at 30 June 2023, an increase of $2.4 billion or 21.7 per cent for FY2023. It also saw net inflows of $1.6 billion and market movement of $0.8 billion.

“Netwealth achieved a record profit of $67.2 million, representing a 20.9 per cent increase from the previous year’s result. Earnings per share increased by 20.6 per cent to 27.5 cents per share,” Mr Heine and Mr Antonie said.

“The board today declared a final fully franked dividend of 13 cents per share resulting in a total fully franked dividends of 24 cents per share for FY2023, a 20 per cent increase from the previous year. Our dividend payout ratio of 87 per cent reflects our continuing high conversion ratio of earnings to cash flow.

“These record results are thanks to the outstanding performance of our executive and growing Netwealth team, with over 550 employees at 30 June 2023. The dedication and talent of our team is the key driver or our continuing success,” the pair added.