Netwealth (ASX:NWL) share price dips despite record results

The Netwealth (ASX:NWL) share price is on the slide today despite the company delivering a record increase to its funds under administration.
The post Netwealth (ASX:NWL) share price dips despite record results appeared first on The Motley Fool Australia. –

falling asx share price represented by woman making sad face

Netwealth Group Ltd (ASX: NWL) shares are on the slide today following the release of the company’s results for the first half of the 2021 financial year (1H FY21). At the time of writing, the Netwealth share price has slumped 4.25% to $17.14.

Let’s take a look at how the wealth management business has been performing.

Netwealth share price slides despite numerous highlights

The Netwealth share price has failed to ignite today despite the company reporting a record half-year increase to its funds under administration (FUA). 

Netwealth increased its FUA for the half by $7.3 billion, or around 23%, taking its total FUA as at 31 December 2020 to $38.8 billion.

For the 12 months to 31 December 2020, FUA grew to $10.3 billion, a 36.1% increase.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $40.5 million — an increase of 30.1% compared to the prior corresponding period (pcp). 

Netwealth’s earnings per share (EPS) was 11.3 cents.

The company reported total income of $72.4 million, which represents a 23.4% increase on the prior half.

Net profit after tax (NPAT) rang in at $27.6 million, which was 34.5% or $7.1 million higher than the pcp.

The board declared a fully franked interim dividend of 9.06 cents per share totalling $22.1 million for the period. The dividend is payable on 26 March 2021.

Company outlook

Netwealth advised that its pipeline of new business and transitions remains strong.

Based on no adverse changes to the operating environment and subject to the timing of transitions, the company expects its FY21 FUA net inflows to be in the range of $8.5 billion to $9 billion.

Netwealth also expects to benefit from growth in its affluent, high net-worth and private wealth groups.

The company added 25 additional technology infrastructure resources across Australia and Vietnam during 1H FY21. The purpose of these is to build synergies with third-party software solutions providers and to continue enhancing operational efficiency and scalability.

Foolish takeaway

The Netwealth share price has gained more than 100% over the past 12 months. Netwealth shares have surged more than 200% since their March 2020 lows but are still trading around 8% lower than their 52-week high of $18.71.

Based on the current Netwealth share price, the company commands a market capitalisation of around $4.4 billion.

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

The post Netwealth (ASX:NWL) share price dips despite record results appeared first on The Motley Fool Australia.

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