INVESTSMART GROUP LIMITED 28 January 2022
For personal use only
Business update - quarter ending 31 December 2021
HIGHLIGHTS
Digital wealth platform continues to deliver strong growth:
- Total income increased 4.7% to $2.374 million (Q2 FY2022 compared to Q1 FY2022).
-
Funds management fees continued to grow for the December quarter, up 20.1% to $679,556 over the prior quarter (Q1 FY2022)
o Funds Under Management (FUM) grew by $70.2m over the quarter to $498 million at 31 December 2021.
o Investor accounts on our PMA platform increased 18.8% to 2,332 over the prior quarter.
InvestSMART FUM | |||||||||||
500 | 16.4% | ||||||||||
400 | |||||||||||
FUM ($m) | 300 | ||||||||||
200 | |||||||||||
100 | |||||||||||
0 | |||||||||||
15 Jun | 15 Sep | 16 Sep 16 Jun 16 Mar 15 Dec | 16 Dec | 17 Mar | 18 Mar 17 Dec 17 Sep 17 Jun | 19 Jun 19 Mar 18 Dec 18 Sep 18 Jun | 20 Dec 20 Sep 20 Jun 20 Mar 19 Dec 19 Sep | 21 Mar | 21 Sep 21 Jun | 21 Dec | |
Active Growth | Active Income | Active Ethical | Capped Fee/Passive |
-
Subscription income from Intelligent Investor and Eureka Report, important elements in our customer ecosystem, grew 0.6% to $1.317 million in Q2 compared to the prior quarter.
o Subscribers grew 0.1% to 10,860 compared to 10,850 in the prior quarter.
For personal use only
Digital wealth platform continues to deliver strong growth
InvestSMART Group Limited (InvestSMART or the Company) (ASX: INV), a leading Australian digital wealth and advice platform providing low-fee investment solutions, is pleased to provide a business update for the December ended quarter, Q2 FY2022.
FINANCIAL RESULTS
FY2022 Q1 | FY2022 Q2 | |||
Financial Results Summary* | September quarte | r | December quarter | % |
$ | $ | |||
Income | ||||
Funds management fees | 565,639 | 679,556 | 20.1% | |
Subscriptions | 1,309,020 | 1,316,843 | 0.6% | |
Commissions income - Insurance^ | 384,570 | 361,935 | -5.9% | |
Other income | 6,932 | 15,309 | ||
Total Income | 2,266,161 | 2,373,644 | 4.7% | |
Operating Expenses | ||||
Rebates paid | 137,446 | 92,977 | -32.4% | |
Employee costs | 1,283,568 | 1,204,775 | -6.1% | |
Marketing costs | 234,112 | 253,936 | 8.5% | |
Other expenses | 732,609 | 715,224 | -2.4% | |
Total Operating Expenses | 2,387,735 | 2,266,912 | -5.1% | |
Operating Profit/(Loss) | (112,574) | 106,732 | ||
Cash at Bank (end of period) | 5,207,153 | 3,850,553 |
* Quarterly results are prepared by management and are unaudited.
^ Includes commissions from Home Loans & General Insurance ($17k for December quarter)
Total Income increased 4.7% to $2.374 million (Q2 FY2022 v Q1 FY2022). In our two primary businesses, income from funds management fees grew 20.1% to $679,556 in Q2 FY2022 vs $565,639 in the prior period. Subscription income grew 0.6% to $1.316 million in Q2 FY2022 v $1.309m in Q2 FY2022.
Employee costs reduced due to decreases in leave provisions in the December quarter.
The decrease in Cash at Bank is largely due to:
- A financial year end campaign to enable annual subscribers to renew in advance ahead of subscription price rises from 1 July 2021. Nearly 33% of our subscribers elected to renew for another 12 months ahead of their usual renewal dates. Subscriptions in advance declined by $558k during the quarter.
- Fundlater loans provided. Fundlater launched in September 2021 (see InvestSMART PMA divisional commentary below for further information). At 31 December 2021 the Fundlater loans receivable balance is $765k (30 September 2021: $458k). Net Fundlater loans provided is $306k during the quarter.
- A final payment of $270k for the acquisition of The Constant Investor (not included in Operating Profit/Loss).
- Payment of annual insurance premiums ($300k excl. GST).
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DIVISIONAL COMMENTARY
Funds Under Management (FUM)
only | FUM continued to grow during the quarter, reaching $498 million by the end of December, a 16.4% increase | ||||||||
on the prior quarter (Q2 FY2022). | |||||||||
The chart below shows growth in FUM across our product suite (see About InvestSMART at the end of this | |||||||||
announcement for further details). | |||||||||
InvestSMART FUM | |||||||||
500 | 16.4% | ||||||||
useFUM ($m) | |||||||||
400 | |||||||||
300 | |||||||||
200 | |||||||||
100 | |||||||||
personalAU$ millions | 0 | 17 Dec 17 Sep 17 Jun 17 Mar 16 Dec 16 Sep 16 Jun 16 Mar 15 Dec 15 Sep 15 Jun | 18 Jun | 19 Jun 19 Mar 18 Dec 18 Sep | 20 Mar 19 Dec 19 Sep | 20 Sep 20 Jun | 21 Jun 21 Mar 20 Dec | 21 Dec 21 Sep | |
Active Growth | Active Income | Active Ethical | Capped Fee/Passive | ||||||
Funds Management Fees - Quarterly | 18MarNumberofaccounts | PMA Accounts | 2,332 | ||||||
0.80 | 0.680 | 1,963 | |||||||
0.70 | 2,000 | ||||||||
18.8% | |||||||||
1,572 | |||||||||
0.566 | |||||||||
0.60 | 1,500 | ||||||||
0.477 | 1,244 | ||||||||
0.50 | 20.1% | ||||||||
1,045 | |||||||||
0.403 | |||||||||
0.40 | 0.351 | 1,000 | |||||||
0.30 | 500 | ||||||||
0.20 | |||||||||
0.10 | - | ||||||||
For | Dec-20Mar-21Jun-21 | Sep-21Dec-21 | |||||||
31/12/20 | 31/3/21 | 30/6/21 | 30/9/21 | 31/12/21 | |||||
Quarter ended | As at | ||||||||
InvestSMART PMA Platform | |||||||||
The InvestSMART Professionally Managed Accounts (PMA) Platform, launched in November 2018, continues | |||||||||
to receive consistent monthly net fund inflows. ETF Portfolios available through the Platform (under a capped | |||||||||
fee model) increased 18.1% to $252.5 million at 31 December 2021 from $213.8 million at 30 September 2021. | |||||||||
The total number of PMA investment accounts increased by 18.8% to 2,332 in the quarter, up from 1,963 at 30 September 2021. Growth was driven organically through our digital acquisition channels, Fundlater loans and the launch of a new Ethical Growth Portfolio.
Fundlater is an invest now, pay later product designed to help younger people invest in an InvestSMART diversified portfolio. The applicant must deposit $4k and receives a $6k non-recourse loan, with the $10k invested into an InvestSMART PMA diversified portfolio. Investors are required to repay the loan in 20 monthly instalments of at least $320 per month (including $20 facility fee).
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Intelligent Investor ASX listed ETFs
use only
Total funds under management (FUM) across Intelligent Investor investments (under a variable fee model) increased 14.7% to $245.7 million from $214.3 million at 30 September 2021. Growth was driven by completion of a secondary offering in the Intelligent Investor Australian Equity Growth Fund (ASX: IIGF) raising $23m and organic growth.
Subscriptions
Subscription income from fee paying subscribers to our Intelligent Investor and Eureka Report content-driven products grew 0.6% on the prior quarter to $1.317 million.
Total subscribers grew 0.1% to 10,860 compared to the prior quarter of 10,850.
Prices for our subscription products increased from 1 July 2021 (see Beat the price rise article). Subscribers were given the opportunity to renew ahead of price increases prior to 1 July 2021, of whom 3,563 accepted, approximately 33% of total subscribers.
1.4
Subscriptions Income - Quarterly
11,000
Subscribers | ||
10,811 | 10,850 | 10,860 |
AU$ millions
1.3
1.2
1.1
1.0
1.224
1.186
1.309 1.317
1.2500.6%
Number of subscribers
10,500
10,000
9,500
9,000
8,500
10,520 | 0.1% | |||||||||
10,073 | ||||||||||
Dec-20 | Mar-21 | Jun-21 | Sep-21 | Dec-21 |
Quarter ended |
31/12/20 | 31/3/21 | 30/6/21 | 30/9/21 | 31/12/21 |
As at |
For personal
Commissions Income - Insurance
Commissions Income - Insurance decreased by 5.9% compared to Q3 FY2022. Commissions Income - Insurance for the half-year ended 31 December 2021 is down 3.6% compared to the half-year ended 31 December 2020. Attrition within the Insurance Commissions book is expected to continue.
PRODUCTS AND SERVICES
InvestSMART launched Fundlater in September 2021 (see above and click this link for the announcement). Fundlater and Bootcamp are designed to appeal to a younger demographic. Bootcamp is designed to educate people taking their first investment steps. Fundlater closes the loop for many first time investors by giving them access to a diversified portfolio at a low cost.
A secondary offer was completed for the Intelligent Investor Australian Equity Growth Fund (ASX: IIGF), one of three ETFs operated under InvestSMART's Intelligent Investor brand. The offer raised $23 million.
The InvestSMART Ethical Growth Portfolio was added to the Professionally Managed Accounts investment platform in November 2021. The platform is designed to allow new portfolios to be added seamlessly.
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FUND PERFORMANCE
For personal use only
InvestSMART PMA Platform
The latest quarterly report and performance of each of InvestSMART's nine investment portfolios can be viewed here. Click 'learn more' to view each portfolio.
Intelligent Investor ASX listed ETFs
- Intelligent Investor Australian Equity Income Fund - ASX: INIF
- Latest quarterly reporthere
- Intelligent Investor Ethical Share Fund - ASX: INES
- Latest quarterly reporthere
- Intelligent Investor Australian Equity Growth Fund - ASX: IIGF
- Latest quarterly reporthere
MARKETING - ENGAGEMENT AND CONVERSION
Engagement and Conversion
We're focused on building awareness of our services through digital advertising, search engine optimisation and media coverage through key spokespeople Paul Clitheroe, Alan Kohler and Effie Zahos. With over 20 years of experience in dealing directly with small balance retail clients, we know that awareness builds trust and engagement, which leads to conversions.
InvestSMART's Intelligent Investor and Eureka Report membership-based content and tools ('Bootcamp' and 'Portfolio Manager') assist investors and are effective lead generators for our investment products.
In November 2021 we entered into a partnership with Financy, an online resource dedicated to women's financial progress and economic gender equality.
CORPORATE
Annual General Meeting
InvestSMART held its FY2021 AGM on 11 November 2021. All resolutions put to shareholders were passed. Chairman Paul Clitheroe's address and Managing Director Ron Hodge's presentation slides can be viewed here.
Annual Report
InvestSMART's FY2021 Annual Report was lodged with the ASX on 15 October 2021. The document can be viewed here.
OUTLOOK
InvestSMART Managing Director, Ron Hodge, said "We have grown Funds Under Management by $252 million in the calendar year to $498 million at 31 December. We are excited to see many years of hard work bearing fruit. This quarter has seen a continuation of this growth and we look forward to 2022 with the goal of further increasing growth in our main revenue streams."
This document has been authorised for release by order of the Board.
For further information or comment, please contact Paul Clitheroe, Chairman, or Ron Hodge, Managing Director and CEO, at InvestSMART Group on 02 8305 6000.
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Disclaimer
InvestSMART Group Limited published this content on 27 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2022 23:25:06 UTC.
