iFAST Corporation Ltd’s Latest Earnings: Strong Growth for the Year

Sudhan P.

Headquartered in Singapore, iFAST Corporation Ltd (SGX: AIY) is an Internet-based investment products distribution platform that provides a comprehensive range of investment products and services to both corporate clients and retail investors.

This morning, the company announced its financial results for the fourth quarter and full year ended 31 December 2017. Here are 10 things investors should know from the earnings announcement:

1. Net revenue for the fourth quarter grew 21.2% year-on-year to S$13.3 million. For 2017, net revenue improved 21.5% to S$49.4 million. The net revenue increases for both the quarter and 2017 were due largely to the growth of iFAST’s business and assets under administration (AUA) in both the business-to-consumer and business-to-business divisions.

2. Singapore was still the major contributor to iFAST’s overall business with a fourth-quarter net revenue of S$9.3 million and a full-year figure of S$34.8 million.

3. Recurring net revenue was at S$11 million for the reporting quarter, up 21.5% from a year ago. For the year, recurring net revenue improved 18% to S$41 million.

4. Profit attributable to shareholders for the quarter surged 118.5% to S$2.5 million. For 2017, this figure jumped 65.9% to S$9 million. China operations saw losses both for the quarter and the year.

5. Quarterly diluted earnings per share (EPS) rose from 0.43 cents to 0.93 cents. 2017’s diluted EPS was 3.37 cents, up from 2.04 cents in 2016.

6. iFAST’s balance sheet remained rock-solid. As at 31 December 2017, the company had S$33.5 million in cash (includes investments in money market funds) and just S$18,000 in finance leases. This is an improvement as compared to a year ago when there was S$22.5 million in cash and S$23,000 in finance leases.

7. Operating cash flow for the quarter soared from S$1.2 million to S$5.1 million. With capital expenditure (purchase of plant, equipment, and intangible assets) increasing slightly from S$2.4 million to S$3.1 million, iFAST’s free cash flow grew from a negative S$1.2 million to a positive S$2.1 million. For 2017, its free cash flow improved from a negative S$1.1 million to a positive S$6.1 million.

8. AUA grew 24.3% year-on-year hit a record high of S$7.58 billion, marking the sixth straight quarter of record AUA levels for the firm.

9. A final dividend of 0.90 cents per share was proposed, up 20% from the final dividend of 0.75 cents seen in the fourth quarter of 2017. For the full year, the total dividend came in at 3.01 cents, 7.9% higher than 2016’s 2.79 cents. The company expects the dividend per share for 2018 to be higher than that of 2017.

10. As for its outlook, iFAST said:

“Barring a major deterioration of the financial markets, we expect the Group’s business in the existing key markets of Singapore, Hong Kong and Malaysia to show further improvement in 2018 compared to 2017.

China is still in its initial stages of building up, and China’s losses in 2018 is expected to be comparable to 2017. In the years ahead, we expect China to be an important contributor to the Group.”

At the current price of S$0.895, iFAST has a trailing price-to-earnings (PE) ratio of 26.1. Excluding the losses from its China operations, iFAST sports an adjusted-PE ratio of 17.9. Its trailing dividend yield stands at 3.4%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of iFAST Corporation Ltd. Motley Fool Singapore contributor Sudhan P owns shares in iFAST Corporation Ltd.