The Praemium Ltd (ASX: PPS) share price is rocketing higher on Wednesday.
In morning trade, the investment platform provider's shares are up 21% to a multi-year high of $1.18.
Image source: Getty Images
Why is the Praemium share price rocketing higher?
The catalyst for the rise in the Praemium share price on Wednesday has been the release of a couple of announcements.
According to the first announcement, Praemium has finalised the strategic review of its international operations. This review has recommended the divestment of the business through a formal sale process. The Praemium Board has met and supports this recommendation.
The release notes that the proposed divestment will allow Praemium to focus its financial and leadership resources on further accelerating its growth trajectory in the Australian platform market.
Praemium also revealed that it has received unsolicited, strong interest from potential buyers. Deloitte Corporate Finance has been appointed to manage the sale process.
Quarterly update
Also giving the Praemium share price a lift was its quarterly update which revealed further strong grow inflows.
According to the release, Praemium achieved record quarterly inflows of $1.2 billion for the quarter. This took its funds under administration (FUA) to a record of $41.7 billion.
This comprises Australian platform FUA of $18.4 billion (up 223% year on year), International platform FUA of $5 billion (up 55%), and VMAAS FUA of $18.3 billion (up 61%). The former was boosted by the acquisition of Powerwrap during the financial year.
Praemium's Interim CEO, Anthony Wamsteker, was very pleased with the quarter.
He said: "We are delighted to report strong and continuing momentum in net flows this quarter. For the Australia business, it is pleasing to see a strong end to the financial year. Our platform inflows achieved a new record, with the combination of Praemium and Powerwrap platforms delivering strong results. Our noncustody solution (VMAAS) also reached a record level of FUA, as advice firms continue to seek outsourced administration for their off-platform assets."
"The International business had a standout quarter, with record inflows and FUA exceeding $5 billion for the first time. We continue to execute on our on-boarding of new clients and opportunities," he added.
The Praemium share price is up 97% since the start of the year following today's gain.
