Azzet reports on two large-cap financials with notable trading updates today
Hub24 shares jump following strong growth outlook
Shares in Hub24 (ASX: HUB) were up around 8% to $87.48 in afternoon trading after the wealth management platform provider posted a 54% rise in net profit to $33.2 million on the back of record inflows into the platform in 1H FY25.
Driven by growth in the platform segment, which saw net inflows of $9.5 billion in the half, total revenue was up 25% to $195.2 million.
Beyond the 1H numbers, the market appears to be equally impressed with the group’s outlook which was underpinned by an upgraded platform funds under administration (FUA) target.
To better reflect the pipeline of opportunities across all customer segments, the group’s platform FUM for FY 2026 was upgraded from the range of $115 billion to $123 billion to the new range of $123 billion to $135 billion.
During the half the number of advisers using the platform increased from 361 to 4,886, up 14%, 84 new distribution agreements were signed and Hub’s market share increased to 7.9%.
With significant opportunities from existing and new customers across the group, CEO Andrew Alcock expects strong growth and increasing profitability.
“By leveraging our unique Group capabilities, we will continue to drive industry transformation while enhancing value for our customers and shareholders,” said Alcock.
Key numbers in today’s results include:
- Platform FUM rose to $98.9 billion.
- Platform segment revenue of $154.2 million, up 29%.
- Underlying platform segment earnings of $66.7 million, up 39%.
- Tech solutions segment revenue of $38.0 million, up 9%.
- Underlying tech solutions segment earnings of $13.8 million, up 37%.
- Group operating expenses of $117.6 million, up 16%.
- Group underlying earnings margin was 39.8%, up 4.7%.
New developments
Hub24, now the 7th largest platform, was recently awarded Best Platform Overall by the Investment Trends Platform Competitive Analysis and Benchmarking Report for the third year running.
Engage, the next evolution of HUB24’s client reporting functionality, leveraging HUBconnect capability, is now in pilot.
To better collaborate with industry providers to develop innovative products that support emerging client needs, Q1 FY25 saw the group announce a strategic alliance with – and a minor stake in - Reach Alternative Investments.
While Tech Solutions, Class continues to deliver consistent growth, 1H FY25 also saw Hub24’s continued investment in developing solutions in the Innovation Lab, leveraging AI, machine learning, robotics and automation to deliver quality and efficiency benefits for both the HUB24 Group and our customers.
Looking forward, [broker] Jarden sees scope for Hub24 to continue gaining market share, with the FY26 outlook being underpinned by growing adviser numbers on the platform, new distribution agreements, and more than $2 billion from one-off migrations (EQT and ClearView).
Hub24 has a market cap of $7.1 billion making it an ASX100 stock. The share price is up around 133% over 1 year and up around 26% year to date.
The stock is in a strong bullish trend confirmed by multiple indicators. Specifically, the 5-day moving average of the stock price is above the 50-day moving average.
Consensus is Hold.
HMC Capital leads ASX gains after delivering a record 1H FY25 result
Driven by stronger than expected management fees and investment income, HMC Capital (ASX: HMC) reported a 240% increase in 1H FY25 pre-tax operating earnings to $202.2 million and a 204% jump in pre-tax operating earnings per share to 51.9 cents.
The market reacted favourably to revelations that 1H25 earnings of $140.5 million were a significant beat on consensus and broker estimates, with the share price up around 12% in afternoon trading.
The alternative asset manager announced an interim 1H FY25 dividend of 6.0c (100% franked), in line with market expectations.
Noteworthy developments during the half included record investment returns and performance fees from its Private Equity division.
Then there was the active deployment of new growth platforms, including digital infrastructure via the DigiCo listing (ASX: DGT); plus acquisition of Neoen’s energy portfolio and the private credit business.
Other key numbers announced today include:
- Statutory profit rose to $166.9 million, compared with $17.8 million previously.
- Assets under management totalled $18.5 billion, up 45%.
- $9.8 billion of real estate managed across multiple vehicles.
- Pre-tax operating EPS of 51.9 cents, up 204%.
Looking forward
Commenting on today’s result, HMC’s CEO David Di Pilla pointed to another record financial result and the 45% increase in AUM, which he described as testament to the company’s ability to execute large-scale and complex transactions in sectors attracting strong demand from investors both in Australia and globally.
“A key highlight for the half was the successful establishment of the $4.3bn DigiCo Infrastructure REIT which means HMC is now a global manager in the rapidly growing and opportunity rich data centre sector. The $2.7bn equity raising represented the largest Australian IPO transaction in over 6 years,” said Di Pilla.
“During the half, we announced a marquee acquisition with HMC securing the Neoen Victoria renewable portfolio for $950m on highly attractive terms. Following this acquisition, we are on track to launch a $2bn institutional platform in the first half of 2025.”
Looking forward, Di Pilla sees momentum pick-up in the company’s real estate division which is on-track to establish three major new unlisted institutional funds which are expected to add over $2.5 billion of potential AUM as new strategies are deployed.
At first glance, Macquarie suspects annualised pre-tax operating earnings per share (EPS) for FY25 is tracking at $0.80, ahead of the company's previous update.
HMC Capital has a market cap of $4.5 billion making it an ASX200 stock. The share price is up around 77% over 1 year and up around 12% year to date.
HMC's 200-day moving average is trending upwards and highlights long-term investor interest in the stock but the 20-day moving average is falling as upward momentum wanes.
Consensus is Moderate Buy.
This article does not constitute financial product advice. You should consider independent advice before making financial decisions.
