iFAST Corporation Ltd (SGX:AIY) is one of the cool companies in Singapore that shares webcasts and/or transcripts of their earnings presentations. In late July this year, iFAST released the results for its fiscal second-quarter (the three months ended 30 June 2016). I had spent time going through the webcast of iFAST’s earnings presentation and noted down nine things that may interest investors. As a quick background, the common investor in Singapore may be familiar with iFAST’s main consumer-facing product, fundsupermart.com, a platform for individual investors to buy and sell funds. The business of iFast can be divided into two buckets: the…
In late July this year, iFAST released the results for its fiscal second-quarter (the three months ended 30 June 2016). I had spent time going through the webcast of iFAST’s earnings presentation and noted down nine things that may interest investors.
As a quick background, the common investor in Singapore may be familiar with iFAST’s main consumer-facing product, fundsupermart.com, a platform for individual investors to buy and sell funds. The business of iFast can be divided into two buckets: the B2C (business-to-consumer) division and the B2B (business-to-business) division.
With that, here are my notes:
- iFAST’s chief executive Lim Chung Chun kicked off the earnings briefing with a summary. He said that it hasn’t been a good first-half of the year. But he also said that iFAST has been making progress toward its long-term vision of being an integrated investment products distribution platform. He opined that this vision is the key to robust growth for the company in the long run. Lim added that in the short run, iFAST’s results can be affected by equity markets.
- Lim quoted a few figures to put this into context. He said that iFAST’s revenue (excluding China) was down 10.6% year-on-year in the first-half of 2016. However, Lim added that expenses rose 7% as the company has not stopped its push towards a broader range and depth of products and services. The combined effect (excluding China) is a 40.5% decline in net profit. If we put China back into the picture, Lim said that iFAST’s net profit fell 62% year-on-year.
- Lim also said that iFAST has a strong balance sheet with cash and investments totaling $58 million at the end of June 2016. Lim said that the board decided to update the company’s dividend policy to 60% or more of net profit. This reflects the board’s confidence in iFAST’s financial position.
- Chief financial officer David Leung took the reins next. He said that iFAST’s PBT (profit before tax) margin, which is based on net revenue, came in at 22.4% for the first-half of 2016, excluding China. The PBT margin is 14.1% if China is included.
- As mentioned earlier, iFAST’s cash and other investments was around $58 million. This breaks down to a cash and cash equivalent level of $28 million and other investments worth $30 million.
- iFAST’s assets under administration (AUA) was $5.63 billion, as of 30 June 2016. Singapore and Hong Kong contributed 73.3% and 21.1%, respectively. Malaysia made up 5.6% of AUA.
- For the first-half of 2016, Leung said that net revenue was $19 million. From this figure, $16.55 million was considered recurring revenue, which was down 5.5% compared to a year ago. Leung added that the average contribution from recurring net revenue as opposed to non-recurring net revenue from 2012 to the first-half of 2016 is 83.4%.
- In terms of net revenue, iFAST’s Singapore operations is still the largest with $13.84 million in the first-half of 2016. Hong Kong contributed $4.12 million while Malaysia contributed $1.02 million. China added $0.05 million as well. In terms of profit, Singapore contributed $3.85 million while Malaysia and Hong Kong pitched in with $0.08 million each. The China operations recorded losses of $1.56 million.
- The B2C recurring net revenue for the first-half of 2016 was $4.89 million while non-recurring net revenue was $0.92 million. For the B2B side, recurring net revenue for the first-half was $11.66 million while non-recurring net revenue was $1.57 million.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.