HUB - HUB24 Limited

Oh ok so Netwealth has come right back $10.11 - $7.39, HUB getting hit as well $15.55 - $11.06, these 2 were over performing the rest of the sector, OVH and PPS, SMSF's are undergoing a large shift into industry funds - apparently, fund management and funds platforms are getting hammered...could be a real change or could be a contrarian opportunity, perhaps a bit of both.

So_Cynical said:

Oh ok so Netwealth has come right back $10.11 - $7.39, HUB getting hit as well $15.55 - $11.06, these 2 were over performing the rest of the sector, OVH and PPS, SMSF's are undergoing a large shift into industry funds - apparently, fund management and funds platforms are getting hammered...could be a real change or could be a contrarian opportunity, perhaps a bit of both.

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Hmm. You always find silver lining on a thunder

having worked in this sector (but with a far more collegiate client facing outfit) it bemuses me to see the aspirations of some and consolidation in the $820 billion investment platform market.

Hub24 lobbed a $60 million takeover bid for ASX-listed rival Xplore Wealth, previously known as Managed Accounts Holdings, on Wednesday. The acquisition of the $15 billion wealth and superannuation platform would consist of a mix of cash and Hub24 scrip, with Xplore valued at $0.20 per share, indicating a 203 per cent premium on Tuesday's closing price. Xplore was a pioneer of the managed accounts business model — bespoke investment portfolios run by wealth managers as opposed to off-the-shelf managed funds — where Hub24 also operates.

As well, Hub24 will acquire stockbroking firm Ord Minnet's portfolio administration and reporting service for $10.5 milliion, which was previously owned by IOOF before being sold off in mid-2019.

And it will acquire new shares in listed financial planning and accounting group Easton Investments, while also divesting its Paragem subsidiary and transferring ownership to Easton. The transaction would result in Hub24 becoming a 40 per cent shareholder in Easton, which owns prominent wealth and accounting firms Hayes Knight, GPS Wealth and Tax Banter.

The combined trio of deals will cost Hub24 about $93 million, partially funded by a fully underwritten placement of $50 million to institutional investors and a $10 million share purchase plan for retail shareholders. It has also secured a $12.5 million debt facility from ANZ and issued $30 million worth of Hub24 shares to Xplore investors.

Hub24 managing director Andrew Alcock said he anticipates the three transactions will add about 13 per cent to earnings per share.

"The successful completion of these transactions which include the acquisition of Xplore Wealth and Ord Minnett’s PARS, will result in a 47 per cent increase in custodial FUA, around 400 new adviser relationships and the expansion of non-custody administration FUA to $14 billion," he said.

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Strong quarterly figures released yesterday. Acquisitions seem to be going well.



Market liking it.

again, strong numbers

March Quarter FY21 Highlights .
• Record HUB24 platform quarterly net inflows of $1.9 billion (an increase of 41% on pcp) and $0.2 billion higher than last quarter
• Total Funds Under Administration is now $51.4 billion, including Xplore Wealth Limited which contributed $17.2 billion as at 31 March 2021, with Platform FUA of $35.6 billion as at 31 March 2021 (up 136% on pcp) and Portfolio, Administration and Reporting Services FUA of $15.8 billion

Market liked the update which was very timely in it's release...

Ferret said:

Strong quarterly figures released yesterday. Acquisitions seem to be going well.

Market liking it.

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HUB seem to make gains when they report... Will find out if it's the same again, on Tuesday.

The last year and a half has seen a solid SP rise.

Hub24 reported a 39 per cent increase in statutory net profit after tax to $21.5 million in 1H 2024, taking interim dividend 32 per cent higher to 18.5c fully franked.

Total funds under administration grew to $91.2 billion, with its platform funds increasing to $72.4 billion.

Livewire's Ally Selby was joined by Regal Funds Management's Jessica Farr-Jones and Spheria Asset Management's Brittany Isakka


Jessica Farr-Jones (BUY): We are a buy on HUB. It's done a fantastic job of taking market share away from the legacy incumbents over the past few years. This has enabled it to compound its funds under administration at over 50%, its revenue at over 30% and its earnings at around 50% as well over the past five years. We think that this is only just the beginning. They've grown their market share from 1% to 7%, but the incumbents still have 59% of the market. So we think that's a trend that will accelerate.
They have a fantastic platform. It was recently rated the number one platform in the market and they have the highest share of net flows in the whole industry over the last year as well. So we think it's a great product, a great management team, and it's on about 21 times FY25 earnings. So we think that that's a reasonable multiple to pay for a structural growth story.

Ally Selby: Okay. Analysts believe its earnings per share will grow by 67% over the next 12 months. Over to you, Brittany. Is it a buy, hold or sell?

Brittany Isakka (HOLD): I'm a hold, Ally. I completely agree with Jess. It's done a great job taking share from the incumbents. It's got a great platform and a great management team. We like the business. However, it still operates in a competitive industry. Arguably, there are still big players who have a big share of the market and I think for us, on valuation grounds - you can tell, we are a bit more valuation-focused - it's trading on 10 times revenue, 47 times FY24 earnings. So for us, it's a hold, just on a valuation basis.

but when HUB becomes the incumbent? it's a finite pool

still heading the right way

Record Q3 platform net inflows of $3.5 billion and Total FUA reaches $100 billion

Q3 FY24 Highlights
• Platform net inflows of $3.5 billion (up 90% on pcp) comprising $2.7 billion (up 47% on pcp) and $0.8 billion from the Equity Trustees (EQT) migration program. This is a March quarter record both excluding and including the migration
• Total Funds Under Administration reached $100.0 billion as at 31 March 2024 (up 30% on pcp), comprising Platform FUA of $79.7 billion (up 34% on pcp) and Portfolio, Administration and Reporting Services FUA of $20.3 billion (up 16% on pcp)
• HUB24 awarded Best Overall Platform, Best Managed Accounts Functionality, Best in Reporting, Best Online Business Management and Best Mobile Platform in the Investment Trends Platform Competitive Analysis and Benchmarking Report
• HUB24 Discover launched in November 2023 has been well received with FUA of $75 million as at 31 March 2024
• HUB24 Platform high-net-worth (HNW) offer enhanced with the addition of non-custodial administration and reporting capability for directly held client assets

still going

.
Underlying Group EBITDA of $118.0 million (up 15% on FY23), Underlying Platform EBITDA of $103.0 million (up 21% on FY23), and Underlying Tech Solutions EBITDA of $22.1 million (up 1% on FY23).

The HUB24 Group recorded Statutory NPAT of $47.2 million (up 24% on FY23) and Underlying NPAT of $67.8 million (up 15% on FY23). Given the company’s strong performance the Directors have determined a final dividend, fully franked, of 19.5 cents per share, to be paid on 11 October 22024.

Total Funds Under Administration (FUA) of $104.7 billion (up 30% on FY23) with Platform FUA increasing to $84.4 billion (up 35% on FY23) ($87.1 billion as at 14 August 2024) and Portfolio, Administration and Reporting Services FUA increasing to $20.3 billion (up 15% on FY23).

Key highlights for FY24:
• Record annual Platform net inflows of $15.8 billion (up 62% on FY23)
• 1st for overall platform quarterly and annual net inflows
• Platform segment revenue of $252.8 million (up 21% on FY23) and UEBITDA of $103.0 million (up 21% on FY23)
• Tech Solutions segment revenue of $70.7 million (up 5% on FY23) and UEBITDA of $22.1million (up 1% on FY23)
• HUB24 Platform ranked first across major adviser and industry surveys
• Final dividend, fully franked of 19.5 cps, bringing the full year dividend to 38.0 cps, fully franked (up 17% on FY23)

Total revenue for FY24 was $327.3 million (up 17% on FY23), driven by strong growth in the Platform segment and consistent growth in Tech Solutions. Operating expenses of $209.3 million (up 18% on FY23), largely driven by lower employee vacancy rates and the myprosperity acquisition.
The UEBITDA margin of 36.1% (FY23: 36.6%) benefitted from operating leverage (1.2%) that was offset by lower deposit spreads (-0.8%), and the purchase of myprosperity (-0.9%).

HUB24 Platform
During FY24, HUB24 delivered record net inflows of $15.8 billion including large migrations (up 62% on FY23) and was ranked 1st for both quarterly and annual net inflows. The HUB24 Platform had the largest quarterly and annual organic market share gains of all platform providers, increasing market share to 7.3% (up from 6.1% in FY23), and is ranked 7th overall.

In FY24, the number of active advisers using the Platform increased to 4,525 (up 13% on FY23) with 141 new distribution agreements signed.

Very strong of late...volume drop off is not slowing this down.

bk1 said:

aVery strong of late...volume drop off is not slowing this down.

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should keep going.

Hub24 reports Q1 total FUA of $112.98bn vs. quarter ago $104.7bn, remains confident in meeting FY26 platform FUA target of $115-123bn

One of my picks for the 2025 competition.

HUB did very well in 2024. I'm taking a punt here that the trend will continue in 2025, after the little wobble in December.

Ferret said:

One of my picks for the 2025 competition.

HUB did very well in 2024. I'm taking a punt here that the trend will continue in 2025, after the little wobble in December.

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...so far, sideways, but just a pause


Q2 FY25 Highlights
• Record quarterly Platform net inflows of $5.5 billion (up 23% on pcp) including $1.5 billion of large migrations from Equity Trustees (EQT)
• Record 1HFY25 Platform net inflows of $9.5 billion (up 31% on pcp)
• Total Funds Under Administration reached $120.9 billion as at 31 December 2024 (up 33% on pcp), comprising Platform FUA of $98.9 billion (up 36% on pcp) and Portfolio, Administration and Reporting Services FUA of $22.0 billion (up 17% on pcp)
• HUB24 Platform ranked first for quarterly and annual net inflows
• HUB24 Super selected as the successor fund for ClearView WealthFoundations (currently $1.3 billion FUA), planned to be migrated to Discover on HUB24 Super in 2HFY25
• Pilot commenced for Engage, the next evolution of HUB24’s market leading reporting capability facilitating enhanced customer experience and customisation
• Class to launch additional property valuation and new property title search integrations

A good update from HUB.

I've no idea what was behind the recent price weakness, but it might be back on track now.