Netwealth Group Ltd (ASX: NWL) shares have experienced a decline, trading at $20.89 this morning, down 4.7% from the previous close of $21.92. This dip comes amid a largely unchanged ASX 200 Index (ASX: XJO), which is down 0.1% at the same time.
Despite this recent drop, Netwealth's FY24 results highlight a strong financial performance. The company reported Funds Under Administration (FUA) reaching $88.0 billion, reflecting a 25.2% increase compared to the previous year. Total income for the year rose 18.9% to $255.2 million, while Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) grew by 23.8% to $124.7 million. Net Profit After Tax (NPAT) also saw a significant increase of 24.1%, reaching $83.4 million. The full-year dividend was declared at 28 cents per share, fully franked, representing a 16.7% increase from the previous year. This performance stands out among ASX financial stocks, which have varied widely in their financial outcomes.
The decline in Netwealth’s share price is notable given the company's impressive performance in FY24. The firm achieved record FUA inflows of $22.0 billion for the year. A fully franked final dividend of 14.0 cents per share was declared, up from 13 cents per share last year. Shares will trade ex-dividend on August 26, with payouts expected on September 26. Additionally, Netwealth reported a robust EBITDA margin of 48.8% and an operating net cash flow before tax of $127.3 million. However, total operating expenses rose by 14.5% to $130.6 million, primarily due to increased employee benefits.
In a strategic move, Netwealth accelerated its acquisition of Xeppo, a data management and analytics platform, which was completed on August 12. This acquisition aligns with Netwealth’s strategy to enhance its data and AI-driven capabilities. Management emphasized the strength of new adviser and licensee relationships, noting that the company remains optimistic about future growth opportunities.
Looking ahead, Netwealth's strong financial position, characterized by significant cash reserves and a debt-free status, supports a positive outlook. The company reported $89.2 billion in FUA as of August 8 and $1.2 billion in net inflows for July. Despite the recent decline in share price, Netwealth’s solid performance and strategic initiatives suggest a strong foundation for future growth.