COVID-19 slows Powerwrap flows
Powerwrap has posted relatively flat net flows since its initial public offering (IPO) in May 2019 but has seen a 27% increase in revenue to $21.4 million for FY20.
In an announcement to the Australian Securities Exchange (ASX) the firm said its funds under administration (FUA) was $8.45 billion up $351 million from the year before.
However, net flows had been relatively flat since its IPO and most of the planned growth anticipated from existing clients had not yet occurred.
It said net flows in June were at $35 million, down from $66 million in March 2020.
“One of the key challenges has been inertia and the difficulties faced by corporates deciding to move platform in a time of remote operations,” Powerwrap said.
“Notwithstanding, start of Q1 FY21 has been positive with recent signing of wealth management boutique Emanuel Whybourne whose principals previously managed approximately $750 million.”
It noted the key contributors to its revenue were from higher cash balances resulting in strong cash margin revenue, platform administration and transaction revenues.
It said its underlying EBITA had an 80.3% improvement on the prior year at -$883,000.
“Despite the impacts of COVID-19, Powerwrap remains in a strong financial position. It was cashflow positive for the June quarter, with $15.6 million in cash at bank,” it said.
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