Funding technology platform Hub24 [ASX:HUB] says that both current market conditions and macroeconomic events are the root cause of the business delivering a slower half of net inflows so far in FY23.
There was reportedly a 23.6% drop in net inflows on those achieved against Q2 FY22, creating a 13.6% decrease for the entire half compared to 1H 2022.
HUB refused to let the result ruin the business’ morale, claiming that its result was a ‘strong’ one in the current climate.
Shares for HUB were worth $27.25 at the time of writing, considering the 2.5% slide by the early afternoon on Tuesday.
Source: tradingview.com
HUB24 posts lagging inflows for Q2 FY23
The funds platform provided its second quarter FY23 results earlier today, revealing it had delivered $2.8 billion in net inflows, which was mostly flat in the first quarter, and otherwise down on its prior corresponding period (pcp).
These were the December quarter highlights as reported by HUB:
- ‘Platform net inflows of $2.8 billion, broadly flat on Q1 (down 23.6% on pcp record inflows achieved in Q2 FY221)
- Net inflows for 1H FY23 of $5.8 billion (down 13.6% on pcp)
- In the latest available Plan for Life data, HUB24 achieved 1st place for quarterly net inflows and maintained 2nd place for annual net inflows
- Total Funds Under Administration (FUA) of $73.0 billion as at 31 December 2022, comprising Platform FUA of $55.8 billion (up 11.7% on pcp) and Portfolio, Administration and Reporting Services (PARS) FUA of $17.2 billion (down 6.3% on pcp due to negative market movement)
- Migrations for the discontinuation of the ‘Xplore Super Admin’ business are now substantively complete’
Source: HUB
Looking deeper into HUB2’s December quarter
HUB said that its business achieved a ‘strong’ result under the current market and macroeconomic environment.
The company posted an outflow of $1.0 billion via its Successor Fund Transfers (SFTs) and, following the termination of its Xplore Super Admin business, which itself had a total of AU$1.4 billion FUA.
According to HUB’s report, platform FUA was $55.8 billion as at 31 December 2022 (up from $50 billion at the same time in 2021), which included positive market movement of $1.6 billion for the quarter.
HUB refuses to be defined by the latest results, the company stating:
‘HUB24’s market leadership position and focus on delivering innovative solutions continues to resonate with our clients, with growth from net inflows and a solid pipeline of opportunities across all customer segments including large national licensees, brokers, boutique advice practices and self-licensed advisers.
‘In the latest available Plan for Life data, HUB24 achieved 1st place for quarterly net inflows and maintained 2nd place for annual net inflows. HUB24’s market share increased to 5.7% as at September 2022 (up 1.1% from 4.6% as at September 2021) and is ranked in 7th place. HUB24 continues to have the fastest growth rate as a percentage of FUA based on annual net inflows.’
HUB’s ASX 200 price indices over the 12-month period by 2022’s closure was negative 5.5%. However, in 2023 so far, the tech stock has inched into the green zone by 2.5%.
As for improvement on the revenue front, HUB will no doubt be among many waiting for positive economic change.
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For Money Morning
