iFast reports 55% jump in Q2 net profit, raises interim dividend

WEALTH management platform iFast Corporation reported a 55 per cent increase in net profit for its second quarter on the back of higher revenue and increased assets under administration (AUA).

In an exchange filing on Friday, the company said net profit for the three months ended June 30, 2021, grew to S$7 million, up from S$4.5 million in the same period last year.

On a per share basis, earnings rose to 2.54 Singapore cents, up from 1.67 cents a year earlier. iFast's directors declared an interim dividend of 1.10 cents per share, an increase of 46.7 per cent over the 0.75 cent dividend declared in Q2 FY20.

iFast said: "Barring unforeseen circumstances, the group expects its business performance for the full year 2021 to show a healthy growth compared to 2020. In addition, the group expects to increase its dividend per share in 2021 compared to 2020."

The higher net profit and dividend payout during the second quarter came as revenue rose 31.7 per cent to S$50.8 million, and iFast said in a statement that its AUA continued to register new record levels.

AUA reached S$17.54 billion as at end June, up 57.3 per cent compared to the a year ago. For the year-to-date, its AUA has risen 21.4 per cent.

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iFast noted that AUA of unit trusts - its key investment asset class - rose to a record S$12.87 billion, representing an increase of 48.7 per cent year-on-year.

iFast said that arising from the increased AUA, its recurring net revenue has continued to grow at a "robust pace", increasing 39.2 per cent in Q2 FY21, compared to the same period a year earlier.

However, it noted that non-recurring net revenue saw growth moderate during the second quarter.

Net revenue represents revenue earned by the group after deducting commissions and fees for financial advisers and securities brokerage expense

iFast said that trading activities were generally more subdued in the second quarter, compared to the first quarter, given that general financial market conditions were more cautious during the period.

Even so, it recorded net inflow of client assets of S$840 million in Q2 FY2021, taking the total net inflows to S$2.12 billion for the first half of its FY.

For the first six months of its FY, iFast's net profit nearly doubled to S$15.8 million, from S$8.2 million a year earlier. Revenue for the first half was also 37.8 per cent higher year-on-year, at S$106.1 million, while net revenue was up 41.4 per cent at S$54.7 million.

iFast noted that its business model had positive operating leverage, with profit before tax margins (based on net revenue) increasing to 34.2 per cent in the first half, compared to 29.6 per cent for the whole of last year.

"iFast Corp believes that the robust growth seen by the group in recent times has resulted from its past investments in building up a strong integrated digital wealth management platform," the company said.

"The group will continue to work hard on various initiatives in all existing markets that the group operates in to ensure that its medium to long term growth prospects remain strong."

iFast said that discussions with industry players are ongoing in Hong Kong as part of the group's preparatory work for the eMPF platform project. It is targeting to give some guidance by the end of this year on the potential growth of its overall Hong Kong business for beyond 2023.

The company also noted its earlier announcement that it has led a consortium to submit an application for a digital bank licence in Malaysia. It said: "This continues the group's efforts in seeking to tap into the global digital banking and fintech opportunities."

iFast shares rose 0.9 per cent or S$0.08 to close at S$9.18 on Friday, before the announcement.