iFast Q4 net profit rises 5.5%; higher final dividend proposed

WEALTH management platform iFast Corporation reported on Monday (Feb 14) a 5.5 per cent year-on-year increase in net profit for the fourth quarter ended Dec 31, 2021.

Net profit for the 3-month period rose to S$7.2 million from S$6.8 million in the prior year period, as revenue grew 13.9 per cent to S$54.6 million.

On a per-share basis, earnings for the quarter rose to S$0.026 from S$0.0251 a year earlier. iFast's directors have proposed a final dividend of S$0.014 per share, an increase of 40 per cent on year from the previous final dividend.

This takes the total dividend for iFast's FY2021 to S$0.048, up from S$0.033 in the prior financial year.

For the full year, the company reported revenue of S$216.2 million, up 27.2 per cent on year. Net profit, meanwhile, grew 44.8 per cent to S$30.6 million for FY21.

The group said its assets under administration (AUA) continued to register new record levels, reaching S$19 billion as at end Dec 2021, representing a 31.5 per cent growth from a year earlier. AUA was up around 3.4 per cent when compared to end-Sept 2021.

The group had nearly S$800 million in net inflow of client assets in the fourth quarter, taking the overall net inflows for the full year to S$3.8 billion.

Net revenue, which is the revenue earned by the group after deducting commissions and fees for financial advisers and securities brokerage expense, was up 31.9 per cent for the year at S$113.2 million.

iFast said its increasing AUA has meant that its recurring net revenue has continued to grow at a "robust pace", rising 35.6 per cent in FY21.

It noted that its profit before tax margin had risen to 31.6 per cent for the year, up from 29.6 per cent in FY20, reflecting the "positive operating leverage of the group's business model".

For the year, the group saw increased profit contribution from most of its key markets. Singapore remained the group's largest net revenue and profit contributor, accounting for some S$28.4 million in profits.

The Hong Kong operations meanwhile, had strong growth in profit contribution, accounting for S$8.4 million in profit, up 44.8 per cent from FY20.

iFast's China operations, however, remained loss-making, with the losses from China widening 19.3 per cent to S$5.8 million, even as net revenue rose 37.3 per cent to S$2.4 million. iFast noted that it is continuing to build its brand and business in both the onshore and offshore Chinese market.

The group said it will be focused on executing its 4-year plan, which includes accelerating its Hong Kong business growth, and adding digital banking and other capabilities to its ecosystem.

It expects its acquisition of the UK-based BFC Bank - announced last month - to result in some initial start-up losses. It is estimating a S$4 million loss contribution from the UK bank in FY22, based on iFast group's 85 per cent stake. Even so, iFast added that it is targeting to achieve profitability for the UK bank starting 2024.

"iFast Corp expects its overall business to achieve robust growth in both revenue and profitability between 2021 and 2025, with Hong Kong's ePension division expected to be the biggest driver from 2023," the company said.

The group's net asset value per ordinary share stood at S$0.4645 as at end-Dec 2021, up from S$0.3822 a year earlier.

Shares of iFast closed at S$6.18 on Monday, down S$0.17 or 2.68 per cent, before the announcement.