The Praemium Ltd (ASX: PPS) share price will be one to watch today after the fintech star reported inflows of $465 million for the quarter ended March 31.
Key highlights from the quarter included:
- Total funds under administration grew to $5.7 billion. A 34% increase on the prior corresponding period.
- Record quarterly inflows of £113 million ($184 million) for its International business.
- Quarterly inflows of $281 million for its Australian business. A 29% increase on the prior year's comparable period.
- A 20% increase in billable portfolios for its portfolio administration software.
- Launched its new pension offering on 31 March – the Praemium Retirement Account.
I thought this was yet another impressive quarter from the financial software platform provider.
I was especially pleased to see funds under administration (FUA) grow strongly both in Australia and in its International segment. Australian FUA grew 29% on an annual basis and International FUA grew 43% over the last 12 months.
Australian inflows remained strong in spite of a quieter than normal holiday period according to the company. Pleasingly it continued to grow its share of the Australian separately managed accounts (SMA) market during the quarter.
FUA in its retail superannuation SMA offering reached $551 million. This equates to a 15% share of the Australian market, compared to 13% during the previous quarter. In my opinion this shows that there is still significant room for the company to grow in the Australian SMA market.
Which should complement the strong performance of its international business. A key driver of the record quarterly international inflows was the contribution of new clients. Approximately 21% of on-platform inflows came from 10 new companies that have signed up in FY 2017.
Should you invest?
I think Praemium is one of the better options on the market for investors looking to gain exposure to the fintech industry.
Its shares may be a little on the expensive side considering they are trading at 32x estimated FY 2017 earnings according to CommSec, but I believe its current growth profile justifies the premium.
Whilst I would probably choose Class Ltd (ASX: CL1) ahead of it, both companies are arguably great investment options today.
