Netwealth earnings up despite surge in FUA, FUM outflows
Netwealth has published its results for the first half of the 2023 financial year (1H23), reporting an underlying net profit after tax (NPAT) of $30.6 million, up 11.4% from $27.5 million in the previous corresponding period.
The result was supported by 18% growth in platform revenue, up from $84.6 million to $99.8 million over the same period.
The group’s total operating income rose 18.8%, from $86.5 million in 1H22 to $102.8 million in 1H23.
The income boost was offset by a 27.2% increase in total operating expenses, from $44.5 million to $56.6 million.
Netwealth also reported 10.2% growth in funds under administration (FUA), up from $55.6 billion to $62.4 billion.
This was despite a surge in net outflows, which rose 47.1% from $2.5 billion in 1H22 to $3.7 billion in 1H23 — offset by a 13.9% increase in FUA inflows to $8.7 billion.
As a result, net flows were down 32% to $5 billion.
Growth in Netwealth’s total funds under management (FUM) were also weighed down by a 30.8% contraction in net inflows to $1.2 billion.
Total FUM grew 4.5% relative to 1H22, closing 1H23 at approximately $14.4 billion.
Netwealth maintained its net inflows guidance for FY23 at $11 billion, subject to “timing of transitions” and “no further deterioration” in the macro and geopolitical environment.
“After a period of increased investment in our people, resources, and technology, our focus is now and driving productivity, efficiency, and operating leverage, which are important for ensuring sustainable growth and profitability,” Netwealth noted.
Netwealth is expecting its non-headcount expenses for 2H23 to remain in line with its 1H23 result, and is forecasting further employee growth over the period.
AUTHOR
Charbel Kadib
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
