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Is Income Asset Management an overlooked stock?

Wed 25 May 22, 2:13pm (AEST)
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Key Points

  • Company’s total assets administered grows to $1.8bn as total assets under administration hits over $800m
  • Boost comes as company is awarded a mandate to execute $160m of bond holdings for undisclosed large NFP
  • Company posted relatively strong quarterly performance results for Q3FY2, but share price has nearly halved since Jan 2022

Income Asset Management (ASX:IAM) has today reported its receipt of a mandate to provide execution services for $160m in bond holdings for a large undisclosed not for profit organisation.

The mandate sees the company's assets under administration grow by 24% to over $800m; and boosts the company's total assets administered to over $1.8bn. 

Revenue will be received for the company's execution services surrounding the bond holdings and cash, with the company noting "Potential for assets and revenue to grow over time through further growth." 

Competitive tender

The company picked up the mandate through a competitive tender process which the company states underlines its competitive strengths, including transparency.

The company positions itself as a financial provider to NFP organisations with assets under administration for over 45 different organisations. 

Management notes the new mandate leverages rising interest rates worldwide and growing demand for fixed income products as investors seek to hedge against volatility and inflation.

(Source: Income Asset Management) A snapshot of financials presented in the company's H1 2022 report
(Source: Income Asset Management) A snapshot of financials presented in the company's H1 2022 report

Underperformance

Recent volatility is reflected in the performance throughout the year to date, with the company trading at a significant discount to where it was a year ago with a share price of 32c. 

This morning, the company is trading at 16c; down -11% heading into mid-afternoon trade. 

Year to date performance has been knocked down some -43% and one-month performance is down -8.57%.

In its latest quarterly report, the company noted new clients had grown 210% with placement fees up 276% to $1.1m. 

Those payments constitute the bulk of the company's Q3 FY22 revenue of $1.77m, up 91% year-on-year. 

As of March 31, the company reported just over $4.5m in cash and cash equivalents.

The company's six month chart reflects a significant discount to the financials index (XFJ)
The company's six month chart reflects a significant discount to the financials index (XFJ)

 

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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