Hub24 share price sinks 7% despite record year

Hub24's shares are taking a bath on Tuesday…

| More on:
A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.

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 Hub24 Ltd (ASX: HUB) share price is sinking on Tuesday morning.

At the time of writing, the investment platform provider's shares are down 7% to $22.06.

Why is the Hub24 share price sinking?

Investors have been selling down the Hub24 share price following the release of the company's fourth quarter update. Although that update revealed a record year of inflows, a sudden slowdown in the final three months appears to have spooked investors.

For the three months ended 30 June, Hub24 delivered platform net inflows of $2.5 billion. This was broadly flat on the prior corresponding period excluding large transitions.

Nevertheless, this couldn't stop the company from reporting a 31.7% increase in annual platform net inflows to a record of $11.7 billion. And despite negative market movements of $3.5 billion, Hub24's full year platform funds under administration (FUA) rose 19.9% in FY 2022 to $49.7 billion.

Together with its Portfolio, Administration and Reporting Services (PARS) FUA of $15.9 billion, Hub24 ended the period with total FUA of $65.6 billion.

While this was an increase of 11.8% year on year, it was a disappointing 4% reduction quarter on quarter.

What else happened?

The release notes that the latest Strategic Insights data shows that Hub24 has maintained second place for annual net inflows. Furthermore, at the end of March, its market share had increased to 5.1% from 3.9% a year earlier.

Management advised that a key driver of its growth has been its flexible approach to supporting advisers to create efficiencies in their business. This led to a strong pipeline of new opportunities across all customer segments including large licensee clients, brokers, boutique advice practices and self-licensed advisers. During the quarter, the total number of advisers using the platform grew 13.8% to 3,486.

Another positive was that the recently acquired Class business completed the year with its strongest June quarter since 2019. Management advised that Class Super, Class Portfolio and Class Trust products reported growth in total net accounts.

In addition, Class' Nowinfinity offering performed well, finishing the quarter with document orders up 4% on the prior corresponding period. Momentum in the Class business is expected to continue into FY 2023.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

Up 74% in 2024, why is this ASX 200 stock rallying today?

Recurring revenues continue to grow.

Read more »

A man activates an arrow shooting up into a cloud sign on his phone, indicating share price movement in ASX tech shares
Technology Shares

Here are my top 2 ASX shares to buy right now

Tech continues to catch my eye.

Read more »

A woman stands in a field and raises her arms to welcome a golden sunset.
Technology Shares

Down 22% in a month, is now a golden opportunity to buy DroneShield shares?

Is now the time to buy DroneShield shares after the past month’s slide? Here’s my analysis.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
Technology Shares

This ASX tech stock is sinking following co-founder's $35 million sale

Insider selling is weighing on this high-flying tech stock. Should you be alarmed?

Read more »

Two brokers analysing stocks.
Technology Shares

Brokers say this growing ASX 200 tech stock is a buy

This tech stock could be a buy according to Morgans and Goldman Sachs.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Technology Shares

Is the Xero share price heading beyond $200?

Goldman Sachs thinks this high-flying stock can scale new heights.

Read more »

Three people gather around a large computer screen where they are looking at something that is captivating their interest with a graphic image of data and digital technology material superimposed to the right hand third of the image.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

ASX tech shares led the market for a third consecutive week with a 4.63% increase.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Technology Shares

50 times earnings! Why Block shares could still be better value than the banks

This expert reckons Block remains a bargain, even near 50 times earnings.

Read more »