HUB24: Solid flows, but a kicker needed to hit the FY24 target

About the author:

Author name:

By Scott Murdoch

Job title:

Senior Analyst

Date posted:

21 July 2023, 7:00 AM

Sectors Covered:

Diversified Financials, Professional Services

• HUB24 (ASX:HUB) reported 4Q23 Platform FUA of A$62.7bn (+5.5% qoq; +26.2% on pcp), with a ~A$1.2bn positive market move and net inflows of A$2.1bn.
• Against a relatively soft backdrop, 4Q23 net inflows of A$2.1bn were solid (-14.8% on the pcp and +11.9% qoq). FY23 net inflows totaled A$9.7bn, -17.2% on pcp.
• Core inflows have slowed across the industry (macro factors elevating gross outflows), which we expect to persist in the short-term. This puts HUB’s FY24 FUA target of A$80-89bn (>28% growth) at risk, which likely requires another meaningful client/transition to be won.
• Whilst flows have slowed, we consider the run-rate (>12% FUA growth pa from net inflow) still supports strong earnings growth. Longer-term, we expect HUB to continue to entrench a market leading position (along with NWL) in the platform sector, which is a key attraction. Add maintained.

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