HUB24: Prosperity takes time

About the author:

Author name:

By Scott Murdoch

Job title:

Senior Analyst

Date posted:

04 May 2023, 7:30 AM

Sectors Covered:

Diversified Financials, Professional Services

• HUB24 (ASX:HUB) announced the acquisition of myprosperity, a client portal technology business. Initial consideration is A$40m in scrip (~1.8% share issue).
• HUB expects an EPS drag through FY24-25; neutral in FY26; and ~4-5% accretive from FY27 (which includes some broad assumptions on wider benefits to HUB).
• Whilst the acquisition looks fully priced (10x FY23F revenue), mgmt expressed high confidence in the strategic rationale to accelerate its ‘platform of the future’ strategy and strengthen the group’s leadership position and wider relevance.
• The current investment market and flows environment remains uncertain which we expect will provide short term volatility/opportunities in HUB. 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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