HUB24 (ASX:HUB) share price lifts 6% amid record platform inflows

The HUB24 Ltd (ASX: HUB) share price is on the move this morning. At the time of writing, shares are up 5.8% to $24.91.

This follows the release of the financial platform company’s half-year results today.

HUB24 share price jumps on outstanding result

• Group revenue up 72% over prior corresponding period to $81.6 million
• Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 80% to $29.7 million
• Total funds under administration (FUA) increased by 118% to $68.3 billion
• Record platform net inflows of $6.7 billion, up 116%
• Statutory net profit after tax (NPAT) up 38% to $8.4 million
• Declared fully franked interim dividend of 7.5 cents per share, up 67%

What happened during the first half?

Today’s first-half results are broadly in line with figures shared by the company in its second-quarter update. Surprisingly, the quarterly update provided little excitement for the HUB24 share price. However, investors are getting some additional details.

Notably, HUB24 achieved substantial growth across all of its key metrics. A key driver for the solid performance was the more than doubling in funds under administration. Part of this was the contribution of HUB24’s Xplore acquisition.

While the company mustered up double-digit earnings growth, it also experienced a significant increase in expenses. Specifically, operational expenses rose 68% to $61.3 million. According to the release, this was attributable to growth in employee count.

Management commentary

In light of the result fuelling the HUB24 share price today, CEO and managing director Andrew Alcock said:

We’ve delivered record net inflows and strong financial results including an increase of 80% in group underlying EBITDA, whilst continuing to deliver on our strategic objectives and ensuring we are well-positioned to capitalise on emerging opportunities. We are very excited about the recent acquisition of Class and how together we can lead change in the wealth industry and enhance value for our customers and shareholders.

What’s next?

Interestingly, HUB24 did not provide any guidance for the second half. However, the company did share its ambitions to reach between $83 billion and $92 billion in platform FUA in FY24.

On the dividends front, the board announced it will be targeting a payout ratio of between 40% and 60% of underlying NPAT. The interim dividend announced today reflects a payout ratio of 42%.

Investors should be aware the ex-date for HUB24’s dividend is set for 18 March. From there, shareholders on the register will be paid their dividend on 18 April.

HUB24 share price snapshot

The HUB24 share price has had a rough run in 2022 so far. Since the beginning of the year, shares in the company have tumbled 12%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has trended around 4% lower.

On a one-year time horizon, ASX-listed HUB24 is up around 6%.

The post HUB24 (ASX:HUB) share price lifts 6% amid record platform inflows appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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