Not even a record first half performance could stop the HUB24 Ltd (ASX: HUB) share price from being dragged lower by the market today.
At the time of writing the investment platform provider's shares are down almost 3% to $10.37.
How did HUB24 perform in the first half?
For the first half of FY 2020, HUB24 reported a 12% lift in group operating revenue over the prior corresponding period to $52.7 million. This was driven by a 38% increase in Platform segment revenue to $35 million, which offset declines in Licensee and IT Services revenue.
Pleasingly, due to a 3% reduction in direct costs, HUB24's gross profit margin expanded to 53% and underpinned a 28% lift in gross profit to $28 million.
This ultimately led to underlying EBITDA growing 71% to $11.7 million and underlying net profit after tax lifting 73% to $5.4 million.
This strong profit growth allowed the HUB24 board to declare a 3.5 cents per share interim dividend, which is up 75% on the prior corresponding period.
What were the drivers of HUB24's growth?
During the first half the company continued its positive momentum and posted record net inflows from new and existing clients. At the end of the period its funds under administration (FUA) reached $15.8 billion. They have since increased to $17.4 billion as of February 21.
This strong FUA growth led to HUB24 increasing its market share to 1.6% at September 30, up from 1.1% a year earlier.
This growth meant the company maintained its 2nd place position for both quarterly and annual net flows. This led to it moving three places to 11th in overall FUA market share.
HUB24's managing director, Andrew Alcock, commented: ''We are pleased to see that our continued focus on product innovation and customer service is delivering the right outcomes for our clients and our shareholders. We have strong momentum as we head into the second half of the year and a significant pipeline of opportunities."
Outlook.
In the second half the company is aiming to accelerate its growth in market share. It expects to achieve this by leveraging existing advisers and licensee opportunities and by converting new opportunities from its strong pipeline.
It also expects its investment in a distribution team to deliver benefits in the second half and beyond.
Looking further ahead, management revealed that it is targeting FUA of $22 billion to $26 billion by FY 2021.
