The growth of SMSFs has given rise to a whole new industry, and this is where Class Limited (CL1) operates. Class develops cloud-based software solutions for the Australian wealth accounting market, specialising in software-as-a-service (SaaS) administration solutions that automate manual workloads, driving high levels of processing efficiency and scalability.
The company reported a "reasonable" March quarter, UBS suggests, with 2,000 net Class Super accounts added. The rate of net additions was above the December quarter but well below prior periods. The company continues to highlight regulatory and political uncertainty.
September quarter account additions were somewhat soft, but largely expected given the delayed lodgements as a result of prior regulatory changes. UBS notes overall customer growth was solid and a strong December quarter is expected.
FY18 results, considered reasonable, revealed a continued increase in the uptake of the cloud-based SMSF software. However, UBS notes continued margin compression as a result of lower realised revenue per account, higher customer acquisition costs and lost accounts from the AMP migration.