The Netwealth Group Ltd (ASX: NWL) share price is sliding today.
Shares in the S&P/ASX 200 Index (ASX: XJO) investment platform provider closed yesterday trading for $21.92. In morning trade on Tuesday, shares are changing hands for $20.89 apiece, down 4.7%.
For some context, the ASX 200 is down 0.1% at this same time.
This underperformance comes following the release of Netwealth's full 2024 financial year (FY 2024) results covering the 12 months to 30 June.
Here are the highlights.
Netwealth share price tumbles despite profit lift
- Funds Under Administration (FUA) of $88.0 billion, up 25.2% year on year
- Total income of $255.2 million, up 18.9% from FY 2023
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $124.7 million, up 23.8% from the prior year
- Net profit after tax (NPAT) of $83.4 million, up 24.1% year on year
- Total FY 2024 dividend of 28 cents per share fully franked, up 16.7% from FY 2023
What else happened with the ASX 200 stock in FY 2024?
The Netwealth share price is falling even though the company reported record 12-month FUA inflows of $22.0 billion for the financial year.
The strong performance saw management declare a fully franked final dividend of 14.0 cents per share, up from 13 cents per share last year. Netwealth shares trade ex-dividend on 26 August. Eligible investors can expect that passive income payout to hit their bank accounts on 26 September.
Among other core financial metrics, the company reported FY 2024 operating net cash flow before tax of $127.3 million and an EBITDA margin of 48.8%.
Expenses were also up over the year, with total operating expenses of $130.6 million running 14.5% higher than in FY 2023. The majority of that cost boost was due to higher employee benefits expenses.
The financial year just past also saw Netwealth accelerate its acquisition of data management and analytics platform Xeppo to advance its data and AI-driven capabilities. That acquisition was completed yesterday, 12 August.
The company also received industry recognition, winning the 'Advised Product of the Year' award at the Chant West Award event for 2024.
And the Netwealth share price has yet to lift today despite the company reporting that the early days of FY 2025 are rolling along well, with FUA at 08 August of $89.2 billion, up $88.0 billion as at 30 June.
The company reported FUA net inflows of $1.2 billion in July.
What did management say?
Commenting on the FY 2024 results that have yet to lift the Netwealth share price today, management said, "We have expanded and strengthened our new adviser and licensee relationships, plus our new business pipeline including conversion rates, remains very strong across all segments."
As for the Xeppo acquisition, management noted:
The acquisition of Xeppo aligns with our strategy which places data at the heart of everything we do. Xeppo is at the forefront of data management and analytics. Further integration of the Xeppo capabilities to Netwealth accelerates our strategy, aimed at delivering value to clients through enhanced data and Artificial Intelligence driven capabilities.
They added, "Our advice enablement strategy multiplies the efforts of our advisers, allowing them to serve more clients as demand continues to outstrip supply."
What's next?
Looking at what could impact the Netwealth share price in the year ahead, the company stated:
Several significant new client wins have begun transitioning flows onto the platform in early FY 2025 with approximately $1.2 billion of FUA net inflows in July 2024. We are confident in our outlook and future growth opportunities which we believe are very significant.
Netwealth said it remains in an "excellent" financial position, with a "significant" cash reserve, debt-free status, and low capital expenditures.
Netwealth share price snapshot
With today's intraday fall factored in, the Netwealth share price remains up 42% over 12 months.
