Income Asset Management Q4 FY2024 Quarterly Activities Report
IAM (IAM) Share Update July 2024 Thursday 25th
Income Asset Management Reports Strong Q4 FY2024 Performance
Income Asset Management (ASX:IAM) has announced its Q4 FY2024 results, showcasing a solid performance with a notable increase in operating revenue and client growth.
Instant Summary:
- Operating revenue of $4.01 million, up 4% from Q3 FY2024 and 29% from Q4 FY2023.
- Total AuA/FuA of $3.69 billion.
- Client numbers grew 10% from the previous quarter and 65% year-over-year.
- One-off expense of $785k for new client-facing staff and $195k in share-based payments.
- Total cash at the end of Q4 FY2024 is $4.7 million.
Financial Performance
Income Asset Management (ASX:IAM) reported an operating revenue of $4.01 million for Q4 FY2024, marking a 4% increase from the previous quarter and a 29% rise from Q4 FY2023. This growth is attributed to favorable market conditions and strategic investments in distribution capabilities.
The company's total Assets under Administration (AuA) and Funds under Administration (FuA) reached $3.69 billion. This includes Capital Markets FuA of $1.91 billion, which saw a 10% increase from the previous quarter and a 35% year-over-year growth. Cash AuA also grew by 7% from Q3 FY2024 and 6% year-over-year, totaling $1.79 billion.
Client Growth and Investments
IAM's client base expanded significantly, with a 10% increase from the previous quarter and a 65% rise year-over-year, reaching a total of 2,153 clients. The growth in client numbers and AuA/FuA is a result of IAM's investment in additional fixed income sales staff and partnerships with key investment platforms such as Netwealth, Wilsons Advisory, ANZ Private Bank, Shaw and Partners, and HUB24.
Operational Highlights
The company continues to see growth in trading activity, particularly in the secondary market. Secondary trading revenue increased by 15% from Q3 FY2024 to Q4 FY2024. The loan market has provided new high-quality secondary market opportunities, supplementing traditional bond trading.
IAM sold its Global Credit Opportunities Fund (GCOF) during the quarter, completing its exit from Funds Management incubation. The sale resulted in a $100k upfront payment and a book loss of approximately $345k, but it will save the company around $460k annually in costs.
Market Conditions
The market conditions for bond and loan investments were favorable throughout the quarter. The delay in RBA rate cuts initially lifted yields, which stabilized mid-year as offshore central banks began easing monetary policy. Credit spreads remained stable-to-lower, creating a positive environment for bond and loan investors.
Cash Flow and Expenses
IAM's total cash at the end of Q4 FY2024 was $4.7 million. The company recorded total cash receipts from customers and interest earned of $4.6 million, while total cash operating outflows and finance costs were $4.9 million. The closing cash balance, combined with total funding available of $10.2 million, provides IAM with an estimated 17 quarters of funding.
There was a one-off expense of $785k for the addition of client-facing staff and $195k in share-based payments to remodel the incentives plan.
The positive financial performance and client growth reported by IAM are likely to boost investor confidence and positively impact the company's stock price. The strategic investments in distribution capabilities and partnerships with key investment platforms position IAM well for continued growth. However, the one-off expenses and the book loss from the sale of GCOF may slightly temper investor enthusiasm.
Investor Reaction:
Analysts have reacted positively to IAM's Q4 FY2024 results, highlighting the company's strong revenue growth and expanding client base. Some investors have expressed optimism about the company's strategic investments and partnerships, which are expected to drive future growth.
Conclusion:
Investors should keep an eye on IAM's continued growth and strategic initiatives. The company's strong performance in Q4 FY2024 and favorable market conditions suggest a positive outlook. Subscribing to updates and monitoring IAM's progress will be crucial for making informed investment decisions.