Praemium Ltd ASX: PPS is an investment management firm having > 500,000 accounts. Despite being an Australia-based firm, they have a presence across the United Kingdom, Jersey, Armenia, and Hong Kong. Their core investment platform is based on Separately Managed Accounts (SMA) technology supporting the firm’s  investment management, portfolio administration, client relationship management (CRM) solutions as well as financial planning tools to the wealth management industry SMA enables wealth managers to execute investment strategy changes across several client accounts and is available in both retail super (SuperSMA) and non-super. They offer Smart Investment Management (Smart), which is an in-house investment management solution. WealthCraft enables financial professionals to develop and expand their wealth management business. Its V-Wrap system offers reporting solutions across several reports and for any date or range of dates. Praemium Portfolio, a portfolio reconstruction engine having a database of historic corporate actions across various equities. WealthCraft offers several modules, like client relationship management, fact find, financial planning administration, etc.

(Chart Source: Company Reports)

From the Company Reports

Cashwerkz’s digital cash investment platform is now available for thousands of wealth advisers in Australia as they will be using Praemium Integrated Managed Accounts Platform. Praemium platform core strength is their support fort wide range of investment assets for consolidated reporting. The Virtual Managed Accounts solution (VMA) has been the market leader for a long time in the non-custodial investment space and currently reports on more than $140 billion of investment portfolios and assets. Praemium is also exploring further adviser efficiency opportunities with Cashwerkz across each of the other managed accounts solutions. The company is providing richer platform reporting for advisers and clients. In addition to an innovative range of interactive charting tools that have further enhanced the client experience, the company’s highly regarded reporting engine now includes a suite of new report options which include the ability to calculate performance reporting on externally held cash accounts as well as enabling advisers to split out FX gains and losses from price gain/loss calculations.

March 2019 Quarter Performance

• Combined quarterly gross platform inflows of $744 million in the March 2019 Quarter;
• UK/International gross platform posted inflows of $234 million (£127 million) during the quarter, which is the highest on record;
• The company experienced the net platform inflows of $438 million (reported for the first time); and
• Platform FUA grew 13% to $8.9 billion in March quarter from strong inflows and improving equity markets.
• The company has expanded the Virtual Managed Account (VMA) reporting solution to Morgan Stanley Wealth Management Australia, with incremental revenue of $1 million;
• PPS has extended the VMA reporting and administration solution to Shaw and Partners, with incremental revenue of $1 million;
• The company during the quarter launched the Praemium Expatriate Retirement Account which is a UK Self-Invested Personal Pension designed to help UK expatriates across the globe plan and save for their retirement;
• The Enhance Group, which is a specialist investment reporting and advice provider for the UK and international trustees, family offices and charities and with over $3 billion under administration, has signed a strategic partnership with Praemium International

(Chart source: Company Reports)

Other Developments

• PPS has released its next-generation integrated managed accounts platform to the market during the March 2019 quarter.
• The major expansion of available platform custodial assets with the addition of ASX 300 & MSCI 200 equities along with a broad range of managed funds, hybrids, XTBs, and local and international ETFs.
• Recently, State Street Global Advisors, partnered with their Managed Accounts platform for new exchange-traded fund (ETF) Model Portfolios. With this move, there would be no investment manager fees on client’s model portfolios helping the client to offer cost-conscious solutions
• A range of new and innovative cash management features that will assist advisers with targeted cash flow management to better manage sequencing risk.

Other Development

The company’s CEO, Michael Ohanessian, has been buying shares on-market again. Mr. Ohanessian had recently snapped up 58,000 shares at an average of 35 cents per share. This was the third purchase the executive has made this month.

Veye’s Take

The company is trading at forwarding 2019 P/E ratio of 55x and the Price/Book value is 6.22x. The company’s Technology upgrades during the previous quarter have also resulted in improved operational efficiency enhancements across both the custodial and non-custodial administration services. These have continued to provide platform users with greater flexibility in the way they manage and engage with their clients. We are bullish on Praemium Ltd and maintain a buy on the price of 0.370