The Praemium Ltd (ASX: PPS) share price is racing higher on Tuesday afternoon following a release from the company.
At the time of writing, the investment platform provider's shares are up 15.67% to 77.5 cents. By comparison, the All Ordinaries Index (ASX: XAO) is 0.3% higher.
Despite the sharp move, the stock remains down around 2.5% in 2026 to date.
Here's what the company announced.
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Praemium outlines technology restructure
After market close on Monday, Praemium confirmed it will undertake a major organisational restructure focused on its technology division.
The move follows the acquisition of Tecknowledge Group Pty Ltd, known as Technotia Laboratories, last month. Management said the restructure will reshape the cost base and improve the performance and functionality of its technology platform.
As part of the changes, Praemium will reduce duplicate IT development, maintenance and infrastructure roles. The integration of Technotia's capabilities is expected to enhance automation and overall system performance.
The company also confirmed it will close its longstanding software development operations in Armenia by the end of the 2026 financial year.
Management targets significant cost reductions
Praemium expects the restructure to deliver material cost reductions once implemented.
In Australia, headcount is anticipated to fall by around 15%, reducing direct staff salaries by approximately $9 million. In Armenia, further reductions of about 13% of the pre restructure base are expected, lowering direct staff salaries by around $3.5 million.
After including the Technotia team, Praemium expects its overall annual technology salary budget, excluding incentives, to decline by roughly $9 million on a run rate basis. That compares to its position before the acquisition.
Any savings in FY26 will be offset by one off redundancy costs estimated at approximately $3.3 million. Further details on operating cost and capital expenditure impacts are expected when the company reports its half-year results on 23 February 2026.
The company has faced pressure on margins in recent periods as it invested heavily in platform development and growth initiatives. Investors have been watching closely for signs that spending is being brought under tighter control without slowing product improvements.
Focus shifts to margin outlook
While restructures can create short term disruption, investors appear focused on the longer-term margin implications.
Praemium operates an integrated platform that provides custody and non-custody investment solutions to advisers and wealth managers. In its recent quarterly update, the company reported platform funds under administration of $32.5 billion, up 8% year-on-year.
With the share price under pressure in recent months, today's update indicates management is focusing on cost control and margin stability.
