The Praemium Ltd (ASX: PPS) share price is up 6.2% so far today after reacting to yesterday's fall from its report.
If you didn't see the report, here are some of the highlights compared to the prior corresponding period:
- Revenue up 25% to $21.5 million
- Gross profit margin up to 81% from 80.4%
- 'Underlying' earnings before interest, tax, depreciation and amortisation (EBITDA) up 51% to $4.2 million
- Earnings before interest and tax (EBIT) up 50% to $3.3 million
- Net profit before tax (NPBT) up 107.7% to $2.7 million
- Net profit after tax (NPAT) up 16.7% to $0.7 million
- Funds under administration up 37%
The market initially wasn't too impressed by this result as the share price plummeted by 4.44% yesterday. However, today it has come roaring back.
In Australia the business is aiming to significantly increase its investment menu, add new asset classes like term deposits and expand its range of international model portfolios. Praemium is also looking to introduce family fee pricing to capitalise on the shift in Australia's wealth market.
Internationally, Praemium is looking to increase its business to reach critical mass and achieve breakeven in 2018. The business is looking to scale up its self-invested personal pension income by acquiring books of business. It will be seeking approval to promote Smartfunds in the Middle East.
One of the key highlights for me was that operating cashflow increased from $0.1 million to $1.9 million, which is a huge improvement and means the business can self-fund a lot of its growth from now on.
Foolish takeaway
Praemium is an exciting fintech company with ample room for growth. The compulsory super contributions, the shift away from large-scale advisors and the technology disruption offered by Praemium should see its funds under management continue to grow strongly in the coming years.
Of course, valuation is always a risk with these types of companies, so it might be worth waiting for another share crash before considering to invest.
