Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Praemium Ltd (ASX:PPS, Financial) has achieved double-digit growth in assets under administration, both organically and through the OneVue acquisition.
- The company has launched a new IDPS, which is expected to further solidify its position in the high net worth segment.
- Praemium Ltd (ASX:PPS) has seen significant growth in its non-custodial service, VMAAS, which is up 8% for the quarter.
- The company has successfully integrated OneVue, which has contributed to stable funds under administration.
- Praemium Ltd (ASX:PPS) has a consistent strategy and long-term focus, which reassures shareholders and aligns with market needs.
Negative Points
- There have been significant outflows from the Powerwrap solution due to advisors departing to other firms.
- The company's service standards are not yet at the level they aspire to, particularly for high net worth clients.
- The superannuation offering has been somewhat neglected in the past, although efforts are being made to improve it.
- There are headwinds affecting the headline numbers, although the underlying business remains strong.
- The integration of multiple platforms and schemes is complex and requires careful management to avoid losing functionality for clients.
Q & A Highlights
Q: What is the company's intention regarding dividend payments?
A: David Coulter, Director: We have a dividend payment policy adopted by the Board to pay a range of NPAT. However, it's a policy prescription, not a rigid floor and ceiling. Our preference is to pay fully franked dividends where possible and engage in share buybacks, as evidenced by the recent $10 million buyback.
Q: Can you provide an update on the product lineup, especially with the launch of the next-generation IDPS?
A: Anthony Wamsteker, CEO: We will consolidate our platform schemes to reduce the number of legal schemes while ensuring no loss of functionality for clients. The priority is running all schemes on a single technology stack, which includes OneVue, the next-gen IDPS, and Powerwrap.
Q: What is the timing for the rollout of the new IDPS, and will all clients have access to it?
A: Anthony Wamsteker, CEO: The new IDPS will be available to everyone relatively early on, though we will initially work with one or two clients to ensure it meets our service standards. We aim to roll it out in a high-profile manner to lift our brand.
Q: What is the impact of the price increases announced on April 1?
A: David Coulter, Director: The price increases focused on trading and execution rather than administration fees. The impact will be detailed in our August 26 results, showing the revenue basis points to FUA for SMA, Powerwrap, and OneVue.
Q: How much more outflow do you expect from the advisor group with departing advisors?
A: Anthony Wamsteker, CEO: The outflow from departed advisors is now up to about a billion dollars, consistent with our previous estimates. We expect this trend to continue for another six months, with a steady outflow of about a quarter of a billion each quarter.
Q: What are the prospects for OneVue's FUA over time?
A: Anthony Wamsteker, CEO: There is potential upside in OneVue's FUA, partly from existing clients and the multi-platform strategy. We are focused on growth opportunities and maintaining client relationships, especially as we migrate to the Praemium tech stack.
Q: How does the pool of cash holdings compare to peers?
A: David Coulter, Director: The allocation to cash varies by product and client segment. SMA is up slightly, Powerwrap is down, and OneVue has a higher allocation to cash. These allocations are driven by the type of investor and their trading activity.
Q: What are the synergies from the OneVue acquisition?
A: Anthony Wamsteker, CEO: The main synergy is running all schemes on a single technology stack. We will also focus on reducing the number of legal schemes and licenses, which will lower capital requirements over the course of FY25.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
