The Onevue Holdings Ltd (ASX: OVH) share price is trading lower today after the ASX financial services company released its 1H20 results.
At the time of writing, OneVue shares are trading 6.67% lower at $0.28 apiece.
What did OneVue announce?
OneVue reported revenue from continuing operations of $24.3 million for the half-year, down 4% compared to the prior corresponding period (pcp) of 1H19.
Growth momentum was observed across all business units and, in particular, managed fund administration scale continues to increase. During the half, high levels of quality revenues were reported by the company.
Ongoing clients administration growth of $2.2 million was achieved during the period. However, this was offset by a decrease in project fees of $1.4 million and a $1.1 million impact of lower interest rates.
The company's strategy continues to be focussed on a high level of automation and integration. According to OneVue, this strategy is now delivering real benefits to clients.
Operating expenses for OneVue from continuing operations decreased by 4.8% to $21.9 million (prior to the AASB 16 adjustment). This lower figure reflected lower project activity levels during the half year period as well as tight cost management implemented by the company.
Additinally, OneVue reported that earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 6.4% to $2.4 million. Meanwhile, EBITDA margin improved by a quite significant 10.6% due to continuing scale benefits achieved by the company.
The company's depreciation and amortisation expense came in at $2.3 million, which was down slightly by 1.5% on the prior corresponding period.
Funds Services and Platform Services divisions
In the Funds Services division, which now constitutes 63% of overall revenues, OneVue reported that revenue from new clients of $0.9 million was offset by a decrease in project fees and lower pricing on a major contract renewal.
EBITDA in the Funds Services division, pre AASB 16, came in at $3.3 million. This was up $0.2 million from the pcp, with margins increasing to 20.7%, reflecting improved operating scale and leverage.
In the Platform Services division, the company reported that revenue reduced by 2.5% to $9.2 million. This was due to lower cash levels held on platform and the Reserve Bank of Australia interest rate cuts from last year. While these factors reduced revenue, they had minimal impact to margin.
OneVue commented that the Platform Services division continues to gain market momentum and scale. The division reported EBITDA of $1.4 million, which was relatively in line with the pcp.
Management Commentary
Commenting on OneVue's 1H20 results, managing director Connie Mckeage said:
"The OneVue businesses all have continuing growth momentum, a clear pathway to enhanced profitability, increasing margins, high levels of recurring revenues and a strategic advantage created by the investment made over the last two years in automation and integration via the Investment Gateway."
