Hub24 share price up 9% on record half-year results and turbocharged dividend

The financial services provider is flying high today on the back of stellar results.

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Key points

  • The Hub24 share price is soaring after the financial services provider released its FY23 half-year results
  • 1H FY23 net profit is up 87% compared to 1H FY22 at $26.6 million 
  • Hub24 will pay a turbocharged interim dividend of 14 cents per share, up from 7.5 cents last year 

The Hub24 Ltd (ASX: HUB) share price is soaring after the financial services provider released its FY23 half-year results.

The Hub24 share price is currently today's second-strongest S&P/ASX 200 Index (ASX: XJO) performer.

Hub24 shares opened at $28.05 and quickly ascended to an intraday high of $29.35, up 8.7% on yesterday's close.

The ASX financial share is now trading at $29.01, up 7.44% for the day.

Hub24 share price tearing up the ASX 200 on record half

Here are the highlights for the six months to 31 December 2022:

  • Group underlying net profit after tax (NPAT) of $26.6 million (up 87% on 1H FY22)
  • Group underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $49.9 million (up 68% on 1H FY22)
  • Statutory NPAT of $15.5 million, up 85% on 1H FY22
  • Earnings per share (EPS) increased by 59% to 18.9 cents per share
  • Total funds under administration (FUA) grew to $73 billion
  • Platform segment revenue of $102.7 million, up 33% on 1H FY22
  • Platform segment underlying EBITDA of $41.4 million, up 38% on 1H FY22
  • Tech solutions segment revenue of $33.4 million and underlying EBITDA of $10.5 million, both significantly up on 1H FY22 following the acquisition of Class in February 2022
  • Fully franked interim dividend of 14 cents per share (up 87% on 1H FY22).

The interim dividend of 14 cents per share is a turbo-boost on last year's interim dividend of 7.5 cents.

As my colleague Tristan recently pointed out, Hub24 has grown its annual dividend per share from 4.6 cents in FY19 up to 20 cents per share in FY22.

Hub24 will pay the interim dividend on 18 April.

What else happened in 1H FY23?

Among Australia's investment platforms, HUB24 is ranked seventh based on market share, according to the Investment Trends Platform Competitive Analysis and Benchmarking Report 2022.

Its market share is now 5.7%, up from 4.6% in the September quarter.

The report found Hub24 was the 'best overall platform' for 2022.

What did management say?

HUB24 CEO Andrew Alcock commented:

We've delivered strong results on all key financial metrics for 1HFY23 …

I am proud that our team's commitment to delivering innovative products and solutions that make a real difference for our clients has been recognised by being awarded Best Platform Overall by Investment Trends this week.

We are in a unique position to build on our success by leveraging our Group capabilities and strong relationships to grow market share, capitalise on emerging opportunities and continue to create value for our customers and shareholders.

What's next?

The company said it expected its growth momentum to continue and reaffirmed its platform FUA target of $80 billion to $89 billion for FY24.

Hub24 share price snapshot

The Hub24 share price is up 8.8% year to date. This is a significant outperformance over its peers, with the S&P/ASX 200 Financials Index (ASX: XFJ) up 3.8% over the same period.

The ASX 200 is up by 5.3% year to date.

As we recently reported, QVG Capital reckons the Hub24 share price is set for growth as the company expands.

In a recent memo, QVG analysts said: "Part of our thesis on HUB is that they'll grow earnings faster than revenues in the future as they benefit from scale."

Hub24's recent update showing $2.8 billion of net platform inflows in Q2 FY23 pleased QVG.

Although the inflows were flat compared to Q1 FY23, and down 23.6% on the record-setting inflows of Q2 FY22, QVG was impressed given the very low investor sentiment seen across the industry in Q2 FY23.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24. The Motley Fool Australia has positions in and has recommended Hub24. 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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