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Interim results

For the six months ended 30 June 2022

Allfunds Group Plc (‘Allfunds’, the ‘Company’ or the “Group”), one of the leading B2B WealthTech platforms for the fund industry, offering fully integrated solutions for both fund houses and distributors, today announces interim results for the six-month period ended 30 June 2022.

Non-financial highlights

Change

Figures in EUR bn, unless otherwise stated

1H 2022

2Q 2022

1Q 2022

1H 2021

y-o-y

(%)

AuA EoP

1,300.9

1,300.9

1,404.8

1,348.4

(3.5)%

Platform Service(1)

915.3

915.3

996.6

949.9

(3.6)%

Dealing & Execution(2)

385.6

385.6

408.2

398.5

(3.2)%

Platform Service Market performance

(132.4)

(76.3)

(56.1)

49.3

n.m.

Platform Service Net flows

(7.4)

(5.0)

(2.4)

85.5

n.m.

Flows from existing clients

(24.4)

(11.6)

(12.8)

51.3

n.m.

Flows from new clients (migrations)

17.0

6.6

10.4

34.2

(50.3)%

Net flows as a % of BoP AuA(3)

(0.7)%

(0.5)%

(0.2)%

11.5%

Net flows as a % annualised of BoP AuA

(1.4)%

(1.0)%

(0.4)%

22.9%

Dealing and Execution variation(4)

(53.8)

(22.7)

(31.1)

Note: AuA refer to Assets under administration at End of Period (“EoP”) 30 of June or 31 of March

  1. Platform Service AuA includes Allfunds standalone, acquisitions of Nordic Fund Market and CS Investlab and BNPP Local Paying Agent business
  2. Only AuA for which we provide Dealing & Execution services
  3. Calculated as the sum of flows from existing clients and from new clients over Allfunds Platform service AuA only as of beginning of period. For
    2022, beginning of period is considered December 2021 (amounting to €1,055bn) and for 2021, BoP is considered December 2020 (amounting to €746bn)
  4. Variation coming from Dealing and Execution portfolio refer to both market performance and flows from existing/new clients

Financial highlights

Figures in € million, unless otherwise stated

Six months ended

Six months ended

Change

30 June 2022

30 June 2021

y-o-y

(%)

Unaudited

Unaudited

Net revenues

259.0

247.2

5%

Net platform revenues

244.4

238.0

3%

Net platform revenue (% of total)

94.4%

96.3%

Net platform revenue margin (bps)

3.5

3.8

Net subscription revenues

14.6

9.2

58%

Net subscription revenue (% of total)

5.6%

3.7%

Adjusted EBITDA

188.4

181.1

4%

Adjusted EBITDA margin

72.7%

73.3%

Adjusted Profit before tax

166.8

161.31

3%

Adjusted Profit after tax

123.5

94.41

31%

Normalised free cash flow

120.8

95.71

Capital expenditure

15.2

10.4

Separately disclosed items

40.1

77.01

Note: Reconciliations from IFRS to Non-IFRS measures can be found on pages 12 – 14

(1) Restated compared to the figures presented in the Interim Report 1H2021. See Pages 12-14 for further information

Allfunds Interim results 2022

2

Interim results

For the six months ended 30 June 2022

Chief Executive Officer´s report

In a challenging environment, Allfunds has delivered solid financial results showing great resilience: we have delivered growth in net revenues and Adjusted EBITDA, we continue to outperform the markets, we keep on capturing market share and investing in strategic initiatives, especially expanding our digital ecosystem. Allfunds has exceptional opportunities ahead, and I remain confident in our ability to deliver long-term growth for our clients, shareholders and employees.

Overview

The first half of 2022 has been influenced by the ongoing war in Ukraine, rising inflation, the expected rise in interest rates and the associated market volatility and uncertainty among market participants as to the global economic impact of these events. Allfunds business has shown great signs of resilience despite market volatility and continued to make good progress on strategic initiatives. I would like to thank our global team for their consistent work to achieve these results.

As a consequence, we have seen solid financial performance in the business:

  • Net revenues up 5% year-on-year to €259m despite decreasing AuA, supported by strong net platform revenue margin (3.5bps) and continued uptake of subscription revenues (58% growth in subscription revenues vs. 1H 2021)
  • Adjusted EBITDA has also increased to €188m for the first six months of 2022, with a 4% increase year-on-year and representing an Adjusted EBITDA margin of 73%, demonstrating operating leverage despite investments (IT and other investments) in organic growth
  • Adjusted Profit After Tax of €124m, a 31% increase year-on-year, benefiting from a lower effective tax rate following the tax step-up election. The Adjusted EPS has improved to €0.196 from €0.150

Our business model has proven resilient during past market turmoils and this time it was not an exception. We continue outperforming markets given the diversification of our assets – in terms of geography, asset class and type of client – and our growth levers: in the first six months, Platform service AuA experienced a year-on-year reduction of (3.5)% vs (7.4)% decline for the industry1, with total AuA standing at €1.3 trillion. As a result, Allfunds’ market position strengthens year-on-year, supported by its focus on client services and provision of innovative solutions to meet client needs.

We benefit from long standing, deeply embedded client relationships resulting in very high retention rates (99.9% for distributors and 98.0% for fund houses) and our business and revenue model is well positioned to capitalize on a market recovery. Historically, we have observed strongly positive net flows when financial markets recover and risk sentiment normalizes.

  1. Based on Total Net Assets for European market, Net Assets refer to UCITS at June 2022. Source: Morningstar

Allfunds Interim results 2022

3

Interim results

For the six months ended 30 June 2022

In addition to the above, the Group benefits from a strong new business momentum:

  • Our ability to add new clients to the platform remains strong: 74 new fund houses and 34 new distributors onboarded in 1H 2022
  • The Group continues to gain market share, year after year reaching around 13% market share of total AuA when considering only the European fund industry. There is significant runway remaining underpinned by open architecture penetration, outsourcing trend, and potential to win share from other/legacy infrastructure providers.
  • In terms of fund houses added to the platform, this year represents another landmark year, with a predominance of fund houses coming from expansion markets such as France, UK & Ireland and the Middle East
  • Pipeline is growing: €17bn of migrations in 1H 2022 with a secured pipeline of €40bn for 2H 2022 and acceleration on subscription-based revenues

Our improved digital ecosystem is evolving fast, thanks to our strategy focused on both organic and inorganic growth. The two acquisitions announced and closed in the period – Web FG and instiHub Analytics – are already accelerating our ambition to keep leading in the WealthTech space by providing cutting-edge and comprehensive solutions for our clients. As a result, Allfunds’ subscription-based business continues its positive trend and represents 6% of total net revenues (c.9% pro forma for completed acquisitions), with a 58% growth in revenues in 1H 2022, to €14.6m. We continue to see a large and growing opportunity in the Digital services ecosystem, and we are well positioned to capture market share.

Finally, we continue the investments on the long-term growth initiatives such as Blockchain, private markets or sub-advisory, that strengthen our value proposition for our clients.

Outlook

Our main purpose is to create value for our clients by empowering them with a unique combination of scale, experience and a digital mindset. Allfunds works to continually improve the solutions it offers with quality, innovation, information safety and by creating shared value for all stakeholders.

The current macro-economic environment is uncertain as high inflation has led to interest rate rises for the first time in the last decade.

However, assuming flat market performance for the remainder of the year 2022, our outlook is for low-single digit growth in net revenues. Once markets recover, we anticipate strong net flows to accelerate AuA growth, and we remain very positive on the evolution of the business. We have a robust and very profitable business model, with a track record of delivering strong organic growth and increasing market share.

And we will continue executing our strategy to deliver long-term growth for all our stakeholders.

Juan Alcaraz

Chief Executive Officer

Allfunds Interim results 2022

4

Interim results

For the six months ended 30 June 2022

Financial Review

The Allfunds Group has delivered a solid financial performance in the first half of the year, with net revenues up 5%, from 1H 2021 €247m to €259m, and strong profitability with Adjusted EBITDA increasing by 4%, from 1H 2021 €181m to €188m. These results demonstrate the resiliency of our business, despite the very challenging macroeconomic and geopolitical conditions, and our strong commitment to continuing our strategy execution.

Business Performance

Assets under Administration (AuA)

The evolution of AuA is impacted by the unprecedented negative market performance in the first six months of the year, representing a drop of €132bn in AuA (8.8% AuA BoP).

Six months

Six months

Figures in € billion

ended

ended

30 June 2022

30 June 2021

Unaudited

Unaudited

AuA BoP

1,494

1,159

Market performance

(132)

49

Flows from existing clients

(24)

51

Migrations (flows from new clients)

17

34

Dealing and Execution variation

(54)

55

Total AuA EoP

1,301

1,348

Note: BoP refers to Beginning of Period considered to be 31 December 2021 and EoP to be End of Period 30 of June 2022

Given the impact from equity capital markets and also fixed income markets, platform service AuA have experienced outflows from existing clients amounting to €(24)bn or (1.6)% over BoP AuA.

In this complex environment marked by a high level of volatility and uncertainty, however, Allfunds has achieved migrations amounting to €17bn (1.1% over BoP AuA).

The resulting Platform Service Net flows amounted to €(7)bn or (0.5)% of BoP AuA (excluding Dealing and Execution (0.7)%).

Allfunds Interim results 2022

5

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Disclaimer

Allfunds Group plc published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 06:03:11 UTC.

Publicnow 2022

All news about ALLFUNDS GROUP PLC

Sales 2022 525 M
535 M
535 M
Net income 2022 78,7 M
80,3 M
80,3 M
Net cash 2022 147 M
150 M
150 M
P/E ratio 2022 70,5x
Yield 2022 1,30%
Capitalization 5 171 M
5 274 M
5 274 M
EV / Sales 2022 9,57x
EV / Sales 2023 8,40x
Nbr of Employees 765
Free-Float 91,4%

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