SelfWealth Ltd (ASX: SWF) shares will be on watch this morning after the company released its quarterly cash flow and activities report. At Friday's close, the SelfWealth share price was trading at 58 cents.
Let's take a look at what the emerging Australian share trading platform reported.
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Why is the SelfWealth share price in focus?
The SelfWealth share price will be on the radar today after the company advised it has continued to gain traction in the third quarter. In its update, SelfWealth highlighted significant growth across key reporting metrics. These included a 178% year-on-year increase in quarterly operating revenue to $5.78 million, a 166% increase in active traders to 85,994 and positive quarterly cash flow from operating activities of $558,000.
The March quarter saw a significant increase in the number of trades executed, to a total of 514,246 trades. This represents a 36% increase on the prior quarter and 220% year on year. In further news that could impact the SelfWealth share price today, the company advised it is seeing US trading make its maiden contribution to revenue and trading volume, accounting for 36,266 trades or 7% of total trades for the quarter.
SelfWealth continues to push into positive cash flow territory with a $558,000 positive operating cash flow for the March quarter and a net cash position of $7.41 million with no outstanding debt.
Key costs for the quarter included an increase in marketing to promote the company's new retail trading functionality in US trading and further take advantage of increased trading interest. The update noted that its customer acquisition costs remain at historically low levels, providing a significant return on investment on marketing spend.
Management commentary
SelfWealth Managing Director Rob Edgley commented on the tailwinds that continue to drive the business and its goals moving forward. He said:
SelfWealth continues to benefit from the key structural changes in investment markets, driven by ultra-low interest rates globally and the digitalisation of investment markets, which were accelerated by the COVID-19 pandemic. We remain focused on the opportunities for market share expansion in this growing market and we are committed to ongoing product innovation to lead disruption in the industry.
US trading drives growth
It will be interesting to see how the SelfWealth share price performs this morning as investors digest the company's latest update.
The record quarter of growth in client acquisition and operating revenue was primarily driven by the company's introduction of US trading. This was launched on 14 December 2020 and allowed users to submit a request to have the US trading feature added to their approved Australian equity portfolios.
US trading features include a USD cash trading account, competitive foreign exchange rates, a flat-fee brokerage of US$9.50 per trade and a choice of over 7,500 US securities across all major US exchanges.
SelfWealth was pleased with the performance of its new US trading product throughout the GameStop Corp trading frenzy. Its platform was reliable amidst platform issues and trading restrictions at competing providers. The company believes this led to record client acquisition, together with a much larger than expected take up of US trading functionality from existing customers.
