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Praemium share price storms higher after half year results release

James Mickleboro

In morning trade the Praemium Ltd (ASX: PPS) share price is pushing higher following the release of its half year results.

At the time of writing the investment platform company’s shares are up 4% to 51.5 cents.

How did Praemium perform in the first half?

For the six months ended December 31, Praemium posted revenue and other income of $24.2 million. This was a 5% increase on the prior corresponding period.

The company’s underlying EBITDA came in at $7 million, which was a 37% increase on the same period last year. This was the 12th consecutive half of profit increase for Praemium.

Management advised that this was driven by improving margins in its key Australian business despite investing heavily in its growth. The Australian EBITDA margin lifted to 49%, up from 42% in the first half of FY 2019.

Also growing strongly was its net profit after tax. That came in at $1.4 million, which was up 122% on the prior corresponding period

First half highlights.

During the first half the company’s global funds under administration (FUA) surpassed $20 billion for the first time.

Platform FUA reached $10.2 billion, which was a 30% increase during the 2019 calendar year. Its International platform FUA grew at an even stronger rate of 54% to over $3 billion.

And its VMA Administration Service (VMAAS) FUA stole the show by reaching $10 billion for the first time. This compares to $0.3 billion a year earlier.

Praemium also reported a 79% jump in UK pension schemes to 1,403 and an 18% lift in WealthCraft seats to 844.

The company’s CEO, Michael Ohanessian, was pleased with the half.

He said: “2019 was a transformational year for Praemium. In February the upgrade to a fully integrated managed accounts platform lifted us to a position where we could compete with our full-service peers. The upgrade also included a new digital portal for advisers that has drawn great feedback from clients and prospects.”

“I would also like to highlight two major business trends we have seen through 2019. The first is the startling rise of our VMA administration service, which grew from $387 million to $10 billion in FUA. Our SaaS reporting product, VMA, has always been the benchmark in accurate portfolio reporting, and the expansion into administering these portfolios on behalf of adviser firms has been a great step forward for the business.”


While no guidance was provided for the full year, Mr Ohanessian appears confident on the future.

“Praemium continues to deliver on its strategic initiatives with its next-gen integrated Managed Accounts platform. 2020 will be an exciting year as we build upon the great strides we took in 2019,” he concluded.

The post Praemium share price storms higher after half year results release appeared first on Motley Fool Australia.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Praemium Limited. The Motley Fool Australia has recommended Praemium Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020