Praemium posts ‘record’ FY profit, driven by managed accounts biz

Praemium, the ASX-listed, Melbourne-based platform services provider that recently saw its CEO dismissed and then, in response to a shareholder backlash, reinstated, today posted a record profit for the year ending on 30 June.

In a statement, the company cited growth in its investment platform revenue, driven by its managed accounts business, attributed much of the strength in its business to its managed accounts business, for its strong results.

Net profit before tax totalled A$220m (US$173m, £133.5m), 42% ahead of the same 12 month period a year earlier, when net pre-tax profit was A$1.56m, according to a results statement posted on the ASX website this morning.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) hit a record A$6.3m 54% ahead of the previous year’s A$4.1m, on revenue that was up 17%, at A$35.4m.

SMA funds under administration grew by 28%, to a record A$6.1bn, the results statement shows, with the international operation accounting for around 36% of this, and 27% ahead of the year before’s level.

Smart Investment Management, the company’s in-house investment management operation, reported FUA growth of 62% to £407m.

“Our strategic focus on managed accounts…is bearing fruit, as financial advisers adapt to evolving investor and business requirements,” chief executive Michael Ohanessian, who returned to the company in May after having been ousted in February, said in a statement accompanying the results today.

As for the full-year results generally, Ohanessian, pictured above, who has been with the company for more than five years, added: “Despite a period of disruption and uncertainty, our dedicated management and staff have delivered a number of key achievements in the 2017 financial year.”

Praemium was founded in 2001 in Australia by Arthur Naodoumidis, a former IT consultant, and listed on the ASX in May, 2006. In addition to Australia, it maintains offices in Jersey, Hong Kong and the UK, where it has been present since 2008.

A key part of the business are its separately-managed investment accounts; it says it currently has more than 300,000 active investor accounts, in addition to looking after more than 700 financial institution clients.

Last year it acquired Wensley Mackay Ltd, a UK SIPP provider, and in today’s results statement, Praemium indicated it sees this as a potential growth area for its international operation.

Shares in Praemium closed on Monday at A$0.42 a share, up half a penny, or 1%, from their close on Friday of A$0.415. This is 28% below their 52-week high, touched on 14 October, of A$0.585.

ABOUT THE AUTHOR
Helen Burggraf
Helen Burggraf is the editor of International Investment. A US-trained journalist, she has worked in Rome, New York City and London, covering everything from the fashion and retailing industries to the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

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