Global stock market conditions went from being very positive in 1QFY2021 to very poor in 1QFY2022 ended March 31, resulting in a “weak start” to 2022 for iFast.

Lower net revenue and higher operating expenses caused net profit to decline 34.9% y-o-y to $5.74 million in 1QFY2022.

In 1QFY2022, net revenue declined 1.2% y-o-y to $28.15 million as an 18.7% y-o-y decline in non-recurring net revenue offset an 8.8% y-o-y increase in recurring net revenue.

The group’s B2C net revenue decreased by 31.7% y-o-y, while its B2B net revenue was up 22.6% y-o-y in 1QFY2022.

Operating expenses increased 10.4% y-o-y to $21.12 million in 1QFY2022 as the group continues to invest and prepare for its next phase of growth under its Four-Year Plan.

See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='https://www.theedgesingapore.com/capital/results/ifast-net-profit-grows-448-fy2021-aua-and-net-profit-reach-record-highs?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>iFAST net profit grows 44.8% in FY2021, AUA and net profit reach record-highs</a>

The group’s AUA declined 2.0% q-o-q but grew 15.6% y-o-y to S$18.63 billion as at March 31, 2022.

Despite the lower earnings, iFast has maintained its first interim dividend for 1QFY2022 at 1 cent per share.

On a fully diluted basis of ordinary shares, earnings per share stands at 1.9 cents, down from 3.09 cents a year prior.

“While it is clear that the wealth management platform business that the group is building has very strong long-term growth drivers, in the short term, financial market conditions can cause interruptions in its growth path, and 2022 looks likely to be one of those years,” reads an April 23 press release.

See also: <a class='gtm_see_also_2_inread' style='text-decoration: underline;' href='https://www.theedgesingapore.com/news/equity-raising/ifast-raises-105-mil-oversubscribed-share-placement?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>iFAST raises $105 mil in oversubscribed share placement</a>

“Overall, the group expects to see a moderate growth in net revenue in 2022 as a whole, but also expects to see some declines in profitability,” adds the group.

The acquisition of the UK-based BFC Bank was completed on March 28, and the bank has been renamed as iFast Global Bank. To fund the acquisition, iFast announced on Jan 11 that it had raised $105 million via a placement of 14 million new ordinary shares to institutional and accredited investors.

As reported, iFast Global Bank is expected to contribute $4.0 million in losses to the group in 2022. “The group is, however, targeting to achieve profitability for iFast Global Bank starting 2024,” says iFast.

With greater clarity on information relating to the Hong Kong ePension project, the group has updated the targeted revenue and PBT for its overall Hong Kong business. iFast now aims to achieve PBT of more than HK$100 million in 2023, HK$250 million in 2024 and HK$500 million in 2025.

Formerly one of the best-performing stocks on the Singapore Exchange, shares in iFast had reached a 52-week high of $10.10 per share prior to the release of its 3QFY2021 results in October.

Shares in iFast closed 11 cents higher, or 1.98% up, at $5.66 on April 22.

Photo: Albert Chua/The Edge Singapore

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