HUB24 Limited has reported robust growth in its half-year results to December 2024, with revenue climbing 25% and underlying net profit after tax soaring 40%. The company also announced a 30% increase in its fully franked interim dividend, underscoring confidence in its ongoing momentum.
- 25% increase in operating revenue to $195.2 million
- 40% rise in underlying net profit after tax to $42.6 million
- Platform funds under administration grew 36% to $98.9 billion
- Fully franked interim dividend increased 30% to 24.0 cents per share
- Strong cash flow generation with $66.5 million operating cash inflow
Strong Financial Performance Amid Market Growth
HUB24 Limited, a leading Australian wealth management platform and technology provider, has delivered a compelling set of interim results for the half-year ended 31 December 2024. The company reported a 25% increase in total revenue to $195.2 million, driven by robust growth across its Platform and Tech Solutions segments.
Underlying net profit after tax (NPAT) surged 40% to $42.6 million, reflecting operational leverage and disciplined cost management. Statutory NPAT also rose sharply by 54% to $33.2 million, underscoring the company’s improving profitability trajectory.
Platform Segment Leads Growth with Expanding Funds Under Administration
The Platform segment, which includes the HUB24 investment and superannuation platform, Portfolio Administration & Reporting Services (PARS), and myprosperity client portals, saw revenue climb 29% to $154.2 million. Platform funds under administration (FUA) grew 36% to $98.9 billion, fueled by strong net inflows of $9.5 billion, including $1.5 billion from large migrations.
PARS FUA also expanded 17% to $22.0 billion, reflecting the growing adoption of non-custodial portfolio administration services. The number of active advisers using the platform increased 14% to 4,886, highlighting HUB24’s expanding footprint in the financial advice community.
Tech Solutions Segment Continues Steady Expansion
Tech Solutions revenue, comprising Class and HUBconnect businesses, rose 9% to $38.0 million. Class, a market-leading SMSF administration software provider, supports around 6,500 customers and approximately 210,000 accounts. HUBconnect delivers data and technology services to the wealth industry, leveraging AI and machine learning to enhance operational efficiencies for financial professionals.
Capital Management and Dividend Policy
HUB24 generated strong operating cash flows of $66.5 million, an 89% increase from the prior corresponding period, supporting ongoing investment and shareholder returns. The company maintains a conservative capital structure with $29.975 million in borrowings and undrawn credit facilities totaling $56 million.
Reflecting confidence in its growth outlook, HUB24 declared a fully franked interim dividend of 24.0 cents per share, a 30% increase over the prior year’s 18.5 cents. This dividend represents a payout ratio of 46% of underlying NPAT, consistent with the company’s medium-term target range of 40% to 60%.
Strategic Positioning and Outlook
HUB24’s recent inclusion in the S&P/ASX100 index and a market capitalisation of approximately $6.6 billion as of February 2025 underscore its rising prominence in the Australian wealth management sector. The company continues to invest in technology innovation and strategic partnerships, including minority stakes in Count Limited and Reach Alternative Investments, to broaden its service offerings.
Management anticipates that the strong momentum in FUA growth and platform adoption will sustain financial performance improvements, although it remains mindful of market volatility and regulatory developments that could influence future results.
Bottom Line?
HUB24’s robust half-year growth and increased dividend signal strong execution, but investors should watch for market and regulatory headwinds ahead.
Questions in the middle?
- How will HUB24 sustain its FUA growth amid increasing competition in the wealth management platform space?
- What impact might rising interest rates and market volatility have on HUB24’s fee income and client retention?
- How will the company leverage its strategic investments in Count and Reach to drive future revenue streams?