The Hub24 share price is soaring: Here’s why

Credit: Steve Jurvetson

Hub24 Ltd (ASX: HUB) has seen its share price soar more than 16% to $4.22 in early trading today after the company announced record quarterly inflows onto its software platform.

The superannuation and financial platform software provider says it saw gross inflows of $403 million and net inflows of $331 million for the second quarter – up 78.3% over the previous year.

The company says it now has $2.4 billion of funds under administration (FUA) at the end of December 2015. Hub24 also says it launched international managed portfolios in December 2015 and has launched a white label partnership with Fortnum Financial Group, which will see $650 million of FUA transfer to Hub24 in the second half of the 2016 financial year.

Hub24 reaffirmed previous guidance to be cashflow positive on a monthly basis by March 2016.

In further good news for shareholders, the company says it is experiencing accelerating and reliable growth due to increased flows from longer-standing licencees, in addition to significant inflows from newer licensees. The number of financial advisers using Hub24’s platforms has grown from 420 at December 2014 to 556 at the end of December 2015.

The launch of international managed portfolios – which gives investors access to directly own international listed companies from more than 15 global markets across North America, Europe and Asia – should give Hub24 another lever to drive growth in funds under administration.

Late last year Hub24 announced that it had received a takeover proposal from IOOF Holdings Limited (ASX: IFL) for $2.75 per Hub24 share. IOOF withdrew its proposal after Hub24 said the offer price was inadequate – which turned out to be the correct decision, given the share price is now over $4.00.

Foolish takeaway

Last financial year, Hub24 posted a loss of around $5 million on revenues of $29 million. Given the company expects to be cashflow positive by March 2016, it doesn’t appear it will be long before the company posts its maiden profit.

Motley Fool Pro is now open to new members

Our most comprehensive and innovative ASX investment service -- has reopened for a brief time, to accept new members. That means you've got the chance to follow along as one top investor puts $1,000,000 of The Motley Fool's own money to work...all in ASX stocks. But to get YOUR front-row seat, you must act NOW. (Please note: just 1,000 new member seats are available.)

Click here to claim YOUR invite!

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.