The Clearview Wealth Ltd (ASX: CVW) share price has had a strong day today, rising 3.26% to close at 48 cents a share. That looks especially strong when you consider the S&P/ASX 200 Index (ASX: XJO) actually fell 0.9% today, meaning Clearview outperformed the broader market by 4.16%.
The catalyst for Clearview's outperformance appears to be its earnings report for the first half of the 2021 financial year (1H21) that was released to the markets this morning before open. The period covers the 6 months to 31 December 2020.
What did Clearview report this morning?
Clearview reported that gross income came in at $155.9 million for the period. That was a 4% improvement on the $149.7 million from the prior corresponding period (1H20). Life insurance premiums were the biggest (and only) growth area in this category. Premiums revenue was reported at $133.3 million, up 7% from the $124.2 million from 1H20. Financial advice fees fell the most, down 19% to $7.1 million from 1H20's $8.8 million.
The company was pleased with the life insurance figures, as this represents a source of recurring revenue for the business.
Meanwhile, operating earnings before tax were $18.6 million, up 47% from the $12.8 million in 1H20. That helped push underlying net profits after tax (NPAT) to $13 million, up 27% on 1H20's number of $10.2 million.
Reported NPAT however, came in at $9.7 million, a 1% drop from the previous period's $9.8 million.
In terms of Clearview's wealth management business, the company reported that funds under management (FUM) rose to $3.02 million. That was up 5% from last year's $2.89 million. This, Clearview states, is the result of both positive net inflows as well as underlying investment performance.
Clearview is pleased with the results overall, stating that the business has "proven resilient to the health and economic impacts of COVID-19 to date". That was despite the fact that the "ultra-low interest rate environment continues to adversely impact earnings".
Pleasingly for dividend lovers, Clearview has told investors to expect a dividend reinstatement in FY2021, subject to the company's performance in the second half of the financial year. Clearview hasn't paid a dividend since September 2018.
What did management have to say about these results?
ClearView managing director, Simon Swanson, said the following on Clearview's performance:
While challenging market conditions persist, this result reflects the impact of initiatives to improve claims management outcomes, boost customer loyalty and strengthen our relationships with professional financial advisers.
Fundamental demand for the quality products and services offered by ClearView has not changed. Australia's complex tax and regulatory environment, ageing population and rising debt levels underpin the need for strategic advice and fit-for-purpose products to help people achieve their financial goals, manage risk and retire with confidence. COVID-19 has only heightened awareness of the need for sound financial advice and relevant products like life insurance.
Going off of the Clearview share price movements today, it seems investors are pleased with this result.
