Netwealth profits surge as industry consolidates
Netwealth profits surge as industry consolidates
The listed platform group posted a healthy increase in profit for the first half of the 2021 year as it continues to benefit from changing advice sector dynamics.
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Netwealth posted a net profit after tax of $27.6 million for 1H21, a $7.1 million increase, or 34.5 per cent up from the previous corresponding period.
The group’s earnings before interest, tax, depreciation and amortisation (EBITDA) came to $30.5 million for the first half, a 30.1 per cent rise from 1H20.
Funds under administration (FUA) as at 31 December had risen by 23.2 per cent during the half-year to $38.8 billion. While there were net inflows of $4.5 billion, Netwealth also saw positive market movements of $2.8 billion during the six months.
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Assets under custody in Australia increased 7.4% to $4 trillion thanks to improving market returns and market valuations, over the six months to 31 December, 2020, according to the Australian Custodial Services Association (ACSA).
ACSA data found the custodian with the largest jump was Netwealth at 23.2% to $38.8 billion. However, the largest provider was JP Morgan at $973.2 billion with an increase of 18.7% during the same time period.
ACSA chief executive, Robert J Brown, said: “The rebound in assets under custody is a result of the bounce in market valuations that occurred over the second half of 2020 on the back of improving market returns and ongoing client confidence in ACSA member’s custody and investment administration solutions.
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Netwealth’s funds under administration reached $40.7 billion as of mid-February and the board has declared a fully franked dividend of 9.06 cents per share.
Netwealth cashes in on industry transformation
Netwealth cashes in on industry transformation
The platform provider saw funds under administration soar over the 2020 calendar year, saying it expects to continue benefiting from consolidation in the advice sector.
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As at the end of the 2020 year, Netwealth had $38.8 billion in funds under administration (FUA), a 36.1 per cent rise ($10.3 billion) on the prior corresponding period (pcp).
There had been $2.6 billion in net inflows for the December quarter, contributing to its FUA net inflows of $9.2 billion for the 2020 calendar year.
Funds under management as at 31 December were $9.3 billion, rising by 15.5 per cent (or $1.3 billion) for the final quarter. During the three months, there had been FUM net inflows of $700 million and market movement of $500 million.