Smartshares lifts FUM 8.2% between December and June

Chief executive Mark Peterson says FUM had grown to $12.3 billion by the end of July.

The company has launched a number of products under the Quay Street brand in conjunction with Craigs Investment Partners, which sold NZX the Quay Street busines in Feburary 2023, and cash flows are starting to build, Peterson says.

However, chief financial officer Graham Law said Quay Street's growth has been slower than expected, given the difficult economic environment, and NZX has written back $7.3 million of the up to $18.75 million earnout provision for the period ending

November 2024 and the targeted earnout for 2025 will be reassessed.

Peterson says that Quay Street “is nevertheless performing strongly with net inflows building and revenue ahead of the acquisition business case.”

The stock exchange operator said its Wealth Technologies platform lifted funds under administration 23.2% to $14.21 billion in the first six months of 2024 with 16.7% of that growth coming from cash flows and new client migrations.

NZX says it expects to have annual recurring revenue of $13.47 billion once all contracted clients are fully migrated.

It migrated five new clients onto the platform in the six months and now has 25 active clients with two more signed up.

“Overall, the pipeline remains strong and we are actively progressing discussion with further potential clients,” it says.

“We remain confident the growth from the new business will ensure NZX Wealth Technologies meets its cash flow objectives.”

Peterson says that NZX is seeing “a lot of activity coming our way” in the Wealth Technologies business.

“Client inquiry continues to build, even over and above the clients who have contracted – clients in the mid-tier level are showing interest in the platform,” he says.

Smartshares grew revenue by $3.3 million, or 6.1%,  and contributed $21.3 million to NZX's total revenue of $57.9 million and grew operatings by $0.8 million, up 4.1%, contributing $10.7 million to total operating earnings of $22.4 million.

The Wealth Technologies business grew revenue by 2.2%, or $1.2 million, to $4.2 million, while operating earnings were up 6.9%, or $1.4 million, but still made an operating loss of $3.2 million.