Platform provider Netwealth has revised downwards its full year funds under management (FUM) and net inflows but is claiming to be otherwise so far unaffected by the market volatility created by the COVID-19 pandemic.
In a market outlook statement released on the Australian Securities Exchange (ASX) the company said that despite recent adverse equity markets, it remained in a very strong financial position, debt free, with significant cash at bank and highly profitable.
It said that, despite a reduction in FUA due to falling global equity markets, Netwealth’s revenue and profitability had been resilient largely due to increased transactions, ancillary revenues and the cushioning impact of sliding administration fee scales and fee caps.
The ASX announcement said that following the Reserve Bank rate cut of 25 basis points Netwealth had amended its outlook to reflect the impact of the cut on its ancillary revenue, “given Netwealth will absorb this reduction in respect to our client’s cash transaction accounts”.
The company forecast full year 2020 revenue to be in the range of $116 million to $120 million with underlying EBITDA to be in the range of $58 million to $62 million.