iFAST Corporation Ltd’s Latest Earnings: Net Profit Almost Doubles
iFAST Corporation Ltd (SGX: AIY) announced its second-quarter earnings this morning. The financial period was from 1 April 2017 to 30 June 2017.
As a quick background, iFAST is an Internet-based investment products distribution platform that has a presence in Singapore, Hong Kong, Malaysia, China and India. It has two main business divisions – one that caters to consumers (B2C) and the other that caters to businesses (B2B).
With that, here’s a quick rundown on the financial figures for the latest quarter:
1. Revenue for the second quarter came in at S$24.7 million, up 27.3% year-on-year. Net revenue (revenue earned after commissions and fees paid or payable to third-party financial advisers) rose 23.4% to around S$12 million.
2. Net profit surged 93% year-on-year to S$2.2 million.
3. Consequently, basic earnings per share went up from 0.44 Singapore cents last year to 0.84 Singapore cents in the latest quarter.
4. As at 30 June 2017, iFAST had S$23.5 million in cash and negligible debt. This is an improvement from the S$20.9 million in net cash figure, as at 31 December 2016.
5. Cash flow from operations for the quarter was S$2.1 million and capital expenditure was close to S$2 million. Therefore, the firm brought in around S$0.1 million in free cash flow for the latest quarter, down from S$1.9 million raked in a year ago.
The improvement in revenue was largely due to the growth of iFAST’s business and Asset Under Administration (AUA) during the period. Its AUA increased 21.1% year-on-year to hit a record high of S$6.81 billion, as at 30 June 2017. The improved market sentiment from the second half of 2016 helped to lift revenue too.
The net revenue can be further broken down into recurring net revenue and non-recurring net revenue. The business module of the firm provides a steady stream of recurring revenue which is based on AUA. For the latest quarter, 83.1% of net revenue was derived from recurring net revenue while 16.9% came from non-recurring net revenue.
Singapore, which contributed to around 72% of total revenue, saw improvement in sales partly due to its recently-launched B2C platform, FSMOne. This platform gives consumers access to investments such as unit trusts, bonds, stocks, exchange-traded funds and robo-advisory portfolios.
Shareholders of iFAST will receive an interim dividend of 0.68 Singapore cents for the second quarter, unchanged from last year. The firm foresees its “financial results in 2017 to show a healthy improvement compared to 2016”.
The firm’s shares closed at S$1.08 yesterday. This translates to a trailing dividend yield of 2.6% and a price-to-earnings ratio of close to 40.