iFast Q4 net profit more than doubles to S$6.8 million on higher AUA

WEALTH management platform iFast Corporation on Friday reported a net profit of S$6.8 million for the fourth quarter ended Dec 31, up 127.5 per cent from S$3 million in the year-ago period.

The increase in net profit came off the back of a 41.6 per cent increase in revenue during the quarter, which hit S$47.9 million, as the group's asset under administration (AUA) rose to a record of S$14.45 billion as at Dec 31 2020.

On a per share basis, earnings grew to 2.51 Singapore cents in Q4 2020, from 1.12 cents in the year-ago period. A proposed final dividend of one Singapore cent per ordinary share was declared, an increase from the 0.9 cent a year earlier.

The proposed final dividend, which is subject to shareholder approval at the company's annual general meeting in April, will bring the total dividend for FY2020 to 3.3 Singapore cents per ordinary share, up from 3.15 cents in FY2019.

In a statement on Friday, iFast said: "Growth in profit was substantially higher than the growth in revenue, showing the positive operating leverage and scalability of the group's business model."

It added that the improvement in the group's business shows that iFast "continues to be a beneficiary of increased digital adoption in the wealth management industry", with the improvements seen across both business-to-business (B2B) and business-to-customer (B2C) segments.

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B2C revenue grew 86.9 per cent in the fourth quarter to S$10.2 million, while revenue from the B2B segment climbed 32.9 per cent to S$37.7 million

For the full year, net profit jumped 122.3 per cent to S$21.2 million, from S$9.5 million in the previous FY. Revenue also saw a 35.5 per cent increase to S$169.9 million.

B2C revenue rose 63.6 per cent to S$34.2 million for the full year, while the B2B business recorded revenue of S$135.7 million, a 29.9 per cent increase.

The increase in revenue came from transaction and service fees as customers increased their investment subscriptions and trading volume in exchange-traded funds and stocks. iFast also noted that there was recurring fee income from "significant" net inflows from clients in unit trusts in the year.

The company noted that the global financial markets continued gains in the fourth quarter of 2020. iFast's AUA grew 14.8 per cent quarter-on-quarter and 44.5 per cent year-on-year.

"Besides improved market sentiment in recent quarters, the strong growth in the group's AUA was on the back of significant net inflows of client assets into the group's platforms during the year," iFast said.

Net inflows in client assets registered a record of S$3.16 billion in FY20, representing 71 per cent of the increase in AUA from S$10 billion at the beginning of the year to S$14.45 billion at the end of the year.

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

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

"Barring unforeseen circumstances, the group expects further growth in its business performance and targets to improve its operating margin in 2021."

Shares of iFast Corporation closed unchanged on Friday at S$6.50, before the results were announced.