Praemium Ltd Improvement in UK revenue relative to the expenses

Improvement in UK revenue relative to the expenses: Praemium Ltd (ASX: PPS) recently reported its financial results for the half year ending 31 December 2016 entailing a record 39% growth in EBITDA to $2.6 million over H1 FY16. There was a 16% rise in revenue and other income to $17.2 million. This was the sixth consecutive half of profit improvement for the group. The Australian SMA market is expanding quickly and EBITDA was of the order of $4.6 million with EBITDA margins of 41%. At the same time, PPS also commented that it is witnessing an improvement in UK revenue (21% growth) relative to the expenses. Particularly, there has been a reduction in losses of the International businesses with UK’s EBITDA loss reducing by 34% to $0.7 million. In local currency, UK revenue and other income witnessed a rise of 51% including 2% from the acquisition of the Wensley Mackay Self Invested Personal Pension (SIPP) business in November 2016. PPS believes that the acquisition will help it gain a well-run regulated position although the business has a relatively small pension book of £50 million. Further, the SIPP sector is expected to get support from an ageing population. Thus, PPS indicates that this move with the current acceleration of platform assets is expected to drive the UK business toward profitability. The group also reduced Asia’s EBITDA loss by 31% to $0.8 million.



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