Praemium announces profit, $20m acquisition

In an announcement to the ASX on Monday morning, Praemium said it increased its revenue for the half-year by 10 per cent to $39.7 million, leading to an underlying EBITDA of $9.0 million, down 15 per cent on the prior corresponding period, and a statutory NPAT of $4 million, down 56 per cent on December 2022.

The platform funds under administration (FUA) was up $2 billion on the first half of FY2023, now sitting at $22.9 billion. Praemium also saw higher numbers of non-custodial portfolios in VMA (64,384, up from 59,745) and VMAAS (8,493, up from 7,702).

Praemium argued that it held a strong balance sheet, with net assets at 31 December 2023 at $105.7 million, compared with $108.1 million at 30 June 2023. Total assets were reduced by $5.9 million to $123.6 million, largely due to the deployment of $7.5 million of cash to buy back shares.

“Praemium has made the investments in capability and risk mitigation which are necessary to realise the full potential of our specialised high-net-worth platforms and portfolio services,” said Praemium chief executive and executive director Anthony Wamsteker.

“We remain a top three service provider in Investment Trends rankings and have once again improved our overall rating, scoring 90 per cent for the first time and only the third platform ever to do so.”

OneVue acquisition

Praemium has also announced it has entered into a conditional agreement to acquire 100 per cent of the Iress OneVue Platform Business (IOPB) from Iress, which it said was a “significant milestone in Praemium’s strategic growth plans”.

The acquisition of OneVue will expand Praemium’s FUA by an estimated $4.0 billion, as well as expanding its client base, increasing market share, and strengthening its position in the Australian platform market.

The consideration for the transaction will comprise up-front cash of $1.0 million, funded from Praemium cash reserves, and an earnout of up to an additional $20.0 million based on growth in FUA measured over an 18-month period post completion.

Praemium said the sale is expected to complete in April 2024, with an 18-month migration process to move OneVue clients to the Praemium platform technology.

“This is an important milestone for Praemium and the beginning of an exciting new chapter in Praemium’s growth story,” Mr Wamsteker said.

“Throughout the review process we have been impressed by the quality of the IOPB people and client base. Praemium and Iress OneVue Platform Business have a mutual objective to help advisers and wealth managers deliver great outcomes through technology-led solutions and an aligned client base and service model, making it a natural fit.”

He added that it is a “highly strategic acquisition” that would add scale and enhance Praemium’s ability to “improve operating margins, capture market opportunities, and address evolving client demands”.

“Our focus will be on ensuring a seamless transition for clients and capitalising on the future opportunities to enhance our market position. We especially look forward to welcoming IOPB’s people and clients to the Praemium platform,” Mr Wamsteker added.

Iress Group CEO, Marcus Price, said the divestment is in line with its strategy of refocusing on Iress’ core businesses of wealth, trading, and market data and superannuation.

“This transaction represents another milestone in our progress towards a simpler, more focused Iress. As part of our refreshed strategy, we are committed to streamlining operations, reducing costs and managing our portfolio of non-core assets for release of capital to reduce debt,” Mr Price said.

“Praemium is one of Australia’s leading investment platform providers, currently holding more than $22 billion in funds under administration. It is a natural home for the clients and employees of the Iress Platform business and we are delighted to have reached an agreement today which is in the best interests of all parties.”