IOOF (ASX:IFL) share price on watch after second quarter update

Here's why the IOOF Holdings Limited (ASX:IFL) share price will be on watch on Thursday morning…

| More on:
hand restin g on laptop computer keyboard with stock prices on screen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The IOOF Holdings Limited (ASX: IFL) share price will be one to watch this morning.

This follows the release of the financial services company's second quarter update.

How is IOOF performing?

It was an eventful second quarter for IOOF, with Funds Under Management, Advice and Administration (FUMA) falling $0.4 billion to $202.4 billion at the end of December.

Management advised that this reflects an uplift of $12.7 billion in FUMA due to market movements, which was offset largely by one-off negative movements of $10 billion.

These negative movements include $8.1 billion from the termination of the BT relationship, $1.5 billion from the liquidation of IOOF's Cash Management Fund, and a $0.4 billion one-off transfer from the Cash Management Trust.

IOOF's Chief Executive Officer, Renato Mota, also revealed that the company was impacted by the Early Release of Super (ERS).

He said: "This quarter has seen ongoing impacts of ERS, especially the final opportunity for early access. As well, we have experienced the ongoing impacts of COVID, including client concern and uncertainly around ongoing and potential economic impacts. Our ClientFirst approach has been invaluable in ensuring that our clients have the support that they need during times of significant uncertainty."

Nevertheless, the strong market performance helped offset much of this to leave its FUMA down only slightly for the three months.

"There has been strong market performance over the quarter and as a result of the scale and diversity of our business, the market contribution of $12.7 billion to FUMA has largely offset outflows."

Mr Moto was also pleased with the progress the company is making with its transformation plans.

He commented: "We are making good progress towards the transformation of the business. In particular, we are transforming the advice business through our Advice 2.0 strategy and progressing our platform simplification strategy, while supporting IOOF's open architecture approach and enabling choice for our clients."

The Chief Executive is now looking ahead to the middle of the year when its FUMA should be boosted by the acquisition of the MLC business from National Australia Bank (ASX: NAB).

"We have continued to meet key milestones in the execution of our transformation program including Advice 2.0 and Evolve. We are progressing well and meeting targets to enable the completion of the proposed MLC acquisition before 30 June 2021," he added.

No guidance has been given in respect to first half profits or its expectations for the full year.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

guy helping girl invest in shares and dividends
Opinions

5 ways for investors buying ASX shares to stay focused during economic uncertainty

AMP Chief Economist, Dr Shane Oliver, offers advice on how to handle the Trump factor.

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why Graincorp, Light & Wonder, Orica, and Wildcat shares are falling today

These shares are having a tough time on Thursday. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Catapult, Flight Centre, Nufarm, and Xero shares are storming higher today

These shares are having a strong session on Thursday. But why? Let's find out.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

1 ASX growth stock down 30% I'd buy right now

This international business is growing core earnings at a strong rate.

Read more »

Concept image of a man in a suit with his chest on fire.
Record Highs

How long can the CBA share price keep this up?

Australia's biggest bank is running hot. Does it make any sense?

Read more »

Four people on the beach leap high into the air.
Broker Notes

4 ASX All Ords shares offering 10% to 30% annual growth: brokers

These ASX All Ords stocks have caught the eye of brokers this week.

Read more »

A young man wearing glasses writes down his stock picks in his living room.
Opinions

1 ASX stock I'm buying now that the US election is over

This ASX stock is appealing to me for a few different factors.

Read more »

drug capsule opening up to reveal dollar signs signifying rising asx share price
Healthcare Shares

3 ASX healthcare shares going gangbusters on Thursday

Investors are sending these ASX healthcare stocks soaring today. But why?

Read more »