Praemium growth continues as SMAs surge


By Sarah Kendell

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Further strong growth in the separately managed account (SMA) market has driven an increase in revenue for managed account platform provider Praemium.

The group announced its half-year results to December 2016 yesterday, recording earnings before interest, tax, depreciation and amortisation of $4.6 million, up from $4.5 million in the half-year to December 2015.

The group noted overall revenue had increased by 15 per cent on the prior corresponding period, with inflows to its SMA investment platform rising by 27 per cent and a rise of 9 per cent in revenue for its portfolio services business.

The modest overall earnings rise reflected a significant 30 per cent increase in headcount over the six months to 31 December, which Praemium chief executive Michael Ohanessian said would put the group on a solid platform to increase its sales and distribution footprint over the rest of the year.

“Our expanded sales presence will target significant demand in the SMA platform market,” Ohanessian said.

“We are also seeing renewed interest in our V-Wrap portfolio administration software following the release of new functionality and several key enhancements.”

Earnings for Praemium’s overall business, including its United Kingdom and Asian arms, rose 39 per cent compared to the six months to December 2015, as losses in the international divisions were significantly reduced.

Praemium’s global funds under management increased by 29 per cent to $5.4 billion by 31 December, capping off the sixth consecutive half of profit improvement for the group, Ohanessian said.

“Growth in recurring revenue streams is generating strong incremental margins – we also continue to invest in product development, sales distribution and implementation to support record inflows to our SMA investment platform,” he said.

“Our results reflect the delivery of our strategy to provide a fully integrated and value-enhancing solution to financial advice businesses.”

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