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Results: Onevue share price down 8.6% on profit fall

Budget results in share price falling

The Onevue Holdings Ltd (ASX: OVH) share price is down today after the company reported its results for the 2019 financial year (FY19) this morning. OVH shares opened at 48 cents this morning but have trended downwards today and are sitting at 42 cents at the time of writing – an 8.6% slide.

What were Onevue’s numbers like?

Onevue reported revenue of $49.6 million, which was an increase of 35.3% year over year. 93% of revenues were recurring.

Earnings (EBITDA) came in at $4.5 million, which is an increase of 59.1% over FY18, while Net Profits after Tax (NPAT) fell from $7.1 million to $1.4 million (down 81%). However, adjusted NPAT (excluding non-recurring items) came in at $1.5 million – an increase of 34.4%.

Operating cashflow for the year was $4.2 million, down by $2.4 million on last year’s levels.

Funds Under Administration (FUA) for managed funds in FY19 increased by $12 billion to $516.2 billion (a rise of 2.38%), while FUA for superannuation members grew 21% to $5.3 billion.

No dividends will be paid, in line with FY18.

As of FY19, Onevue now has two sources of revenue (platform services and fund service) which is down from the six revenue streams that the company boasted in FY17.  The simplification and streamlining of revenue has also been of benefit to the company.

Further, Onevue has successfully fully automated the buying and selling of held managed funds, which has led to lower management costs overall and easier future scalability potential.

Outlook for Onevue

Whilst the company has not provided any quantitative guidance for FY20, management is expecting “increased scale benefits and margin expansion via accelerated FUA”. Onevue is also planning an AI (artificial intelligence) trial at its customer service centres which, if successful, will likely lead to further cost savings.

The company has noted that the increasing structural fragmentation of the financial advice industry is continuing to benefit the company, as specialist platforms increase in popularity. Onevue is expecting significant market opportunity for both organic and acquisitive accelerated growth going forward.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Onevue Holdings Ltd. 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 Scott Phillips.

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