‘21
ANNUAL REPORT
Year ended 30 June 2021
1
CONTENTS
3
4
5
11
23
46
47
48
49
Appendix 4E – Year Ended 30 June 2021
Financial Highlights FY21
Chairman and Managing Director’s report
50
51
52
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ report
Remuneration report
101 Directors’ declaration
102 Independent auditor’s report
Auditor’s independence declaration
107 ASX additional information
Financial report
109 Corporate information
Consolidated statement of profit or loss
and other comprehensive income
Consolidated statement of financial position
CORPORATE GOVERNANCE
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, HUB24
Limited and its Controlled entities (‘the Group’) have adopted the fourth edition of the Corporate Governance Principles
and Recommendations which was released by the ASX Corporate Governance Council on 27 February 2019, effective for
the financial years beginning on or after 1 January 2020.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2021 is dated as at 30 June 2021
and was approved by the Board on 23 August 2021. The Corporate Governance Statement is available on HUB24
Limited’s website at www.hub24.com.au/corporate-governance-statement.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 2
HUB24’s footprint has grown
considerably through FY21, as the
Company delivered record organic
netflows and completed a series of
strategic transactions providing
increased scale, new key client
relationships and product capability
to access new client segments.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
APPENDIX 4E – YEAR ENDED 30 JUNE 2021
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Revenue from continuing operations1
110,853
82,510 Up
Net profit/(loss) after tax for the period attributable to equity holders
Basic earnings per share (cents)
Diluted earnings per share (cents)
9,769
14.83
14.28
8,228 Up
13.13 Up
12.85 Up
Year ended
30 June 2021
$’000
Year ended
30 June 2020
$’000
3
%
change
34.4%
18.7%
13.0%
11.1%
1 Revenue from continuing operations includes a fair value gain on contingent consideration of $1.57 million ($0.85 million FY20). Refer to the
Consolidated Statement of Profit or Loss and Other comprehensive income for further details.
DIVIDENDS
Interim dividend
Final dividend
Amount
per security (cents)
Franked
per security (%)
4.50
5.50
100
100
Subsequent to year end the directors have declared a fully franked final dividend of 5.5 cents per share (a fully franked
3.5 cents per share final dividend was paid following the year ended June 2020).
Dates for the dividend are as follows:
Ex-date
Record date
Dividend payment date
EXPLANATION OF RESULTS
13 September 2021
14 September 2021
15 October 2021
Refer to the attached Directors’ Report and review of operations for further explanation.
Net tangible assets (per fully paid ordinary share)1
30 June 2021
30 June 2020
$1.13
$0.56
1 Net tangible assets (NTA) used for the calculation of NTA per fully paid ordinary share are inclusive of both right of use asset and lease liabilities.
CHANGES IN CONTROLLED ENTITIES
HUB24 Limited completed the acquisition of investment platform provider Xplore Wealth Limited (Xplore) (ASX:XPL), sold
the Licensee segment (Paragem Pty Ltd) to Easton Investment Limited (Easton; ASX:EAS) and acquired an interest in Easton
during the course of FY21. HUB24 Limited has not gained or lost control of any other entity during the reporting period.
AUDIT
The report is based on accounts that have been audited by the Group’s auditors, Deloitte Touche Tohmatsu.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 4
FINANCIAL HIGHLIGHTS FY21
GROUP
UNDERLYING EBITDA1
$36.2m
£47%
GROUP
UNDERLYING NPAT2
$15.0m
£53%
GROUP COST TO
INCOME RATIO
67.1%
FY20: 69.5%
TOTAL GROUP
REVENUE
$110.9m
£34%
FULLY FRANKED FINAL DIVIDEND
DILUTED EARNINGS PER SHARE
5.5 cents per share
FY21 DIVIDEND: 10 CENTS PER SHARE
FY20 DIVIDEND: 7.0 CENTS PER SHARE £43%
14.3 cents
£11.1%
PLATFORM NETFLOWS $8.9b 82%2
PLATFORM FUA OF $41.4b £141%2
PARS FUA OF $17.2b (FY20: $0.2b)3
NUMBER OF ADVISORS
NUMBER OF PARS ACCOUNTS
PLATFORM SEGMENT REVENUE
3,063
£48%
7,538
FY20: 132
$101.1m
£36%
All percentage changes shown above are relative to FY20.
1 Group Underlying EBITDA from continuing operations up 46% to $36.7 million (FY20: $25.2 million).
2 Custodial FUA Administration Services.
3 Non-custodial FUA as Portfolio Administration and Reporting Services (PARS).
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
5
CHAIRMAN
AND MANAGING
DIRECTOR’S
REPORT
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
6
1. INTRODUCTION
Dear Shareholders,
On behalf of the Directors, we are pleased to present
you with this Annual Report for HUB24.
In what has been a challenging year for many
Australian businesses, HUB24 has remained focussed
on developing innovative product solutions and
delivering customer service excellence to empower
licensees and advisers to deliver better financial
futures for their clients. FY21 was a strong year
of growth for HUB24 with record net inflows. The
wealth management market dynamics are providing
significant further opportunities for HUB24, and
the Company is well-positioned to capture these
opportunities.
HUB24’s footprint in financial services has grown
considerably through FY21, as the Company completed
a series of strategic transactions which delivered
increased scale and provided new key client
relationships and product capability to access new client
segments. As well as increasing FUA from acquisitions,
HUB24 has achieved strong organic growth, and the
Company’s success has been reflected in the key
financial metrics for the year.
KEY FINANCIAL METRICS
Total Group Revenue of $110.9 million
up 34% on FY20
Group Underlying EBITDA of $36.2 million
up 47% on FY20
Platform FUA grew by 141% to $41.4 billion
including record netflows of $8.9 billion and
$11.2 billion from the Xplore acquisition
PARS FUA of $17.2 billion as at 30 June 2021
including $9 billion from the acquisition of
Ord Minnett PARS, up from $0.2 billion as at
30 June 2020
In October 2020 we announced the acquisition of Xplore
Limited via a scheme of arrangement, the acquisition of
Ord Minnett PARS, the divestment of Paragem to Easton
Investments Limited (Easton) and strategic investment in
Easton. The transactions were completed on schedule
and are all performing to expectations. With the
completion of these transactions Platform FUA now
consists of Xplore platform and HUB24 platform, whilst
PARS FUA represents Ord Minnett and Xplore PARS FUA.
HUB24’s financial report begins on page 47 of this
annual report.
Given these strong financial results the Company has
announced a fully franked full year dividend of 5.5 cents,
this brings the full year dividend to 10 cents, an increase
of 43% on the prior year.
HUB24 has continued to be recognised by financial
advisers and the industry for customer service and product
excellence. During FY21 the HUB24 platform was awarded:
• Best Platform Overall in Investment Trends 2020
Platform Benchmarking and Competitive Analysis Report
• 1st for Overall Satisfaction by advisers in the 2021
Wealth Insights Platform Service Level Report and first
in five of the nine survey categories including platform
offering, administrative support, ease of doing
business, communications and reporting and IT and
Web functionality.
In the recent Investment Trends Adviser Needs Report
(previously called Planner Technology report) HUB24
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 7
PLATFORM FUA AND UNDERLYING EBITDA TRENDS
SHARE PRICE AND DIVIDEND TRENDS
maintained its 2nd place ranking in both adviser satisfaction
and adviser advocacy and has consistently ranked in the
top 2 platforms for the last 6 years. Additionally, HUB24 was
ranked first in seven categories including administrative
accuracy, client portal, tax optimisation tools, helpfulness of
contact centre staff, contact centre support, follow-up with
problems, and complaints handling.1
Over the last 12 months the shift towards specialist
platforms has continued as consolidation has increased
in the institutional platform sector and the banks
continue to exit from wealth management. Institutional
platforms have either partially or completely divested
their wealth management arms or are re-evaluating their
wealth management strategy. Specialist platforms have
continued to dominate net inflows with over $16 billion
net inflows over the past year, whilst institutional platforms
experienced $14 billion in net outflows overall.2
In the licensee segment, the shift away from institutional
advice licensees continues, privately-owned licensees
continue to grow with three out of five advisers now
privately licensed, and the majority of advisers who are
exiting the industry are exiting from the institutional
space.3 HUB24 is well-placed to leverage this growing
trend, having built solid relationships with large national
licensees who are wanting to collaborate with platform
and technology providers that are investing and
continuing to innovate.
Throughout FY21 advisers remained focussed on
supporting their clients through the financial impacts
of the pandemic, whilst also refining their value
proposition, creating efficiencies in their business and
managing ongoing regulatory change. HUB24’s approach
is to support advisers by providing them with flexible
options to manage regulatory change and to continue to
deliver a wide range of investment choices that enable
them to deliver value to their clients, the validation of
this approach is reflected in the recognition of HUB24 as
a platform of choice by independent industry surveys.
Meanwhile, the demand for financial advice has
increased, with the COVID-19 pandemic an additional
catalyst as Australians face economic uncertainty and
market volatility. In a recent Investment Trends survey,
it was estimated that 2.6 million non-advised Australians
intend to seek help from a financial adviser over the next
two years, whilst 44% of the Australians surveyed said
the COVID-19 pandemic had increased their likelihood
of seeking advice. Whilst demand is increasing so is the
cost of delivering financial advice with the median advice
fee per client rising to $3,240, making it inaccessible for
many Australians.4
HUB24 is committed to working with licensees and other
industry participants to develop innovative solutions that
will enable cost-effective advice.
HUB24 has continued to lead the market in the growing
managed portfolios segment, maintaining 1st place
Investment Trends 2020 Adviser Needs Report.
1
2 Strategic Insights Platform Market Share Analysis March 2021.
3 Adviser Ratings Musical Chairs Report Q2021.
4
Investment Trends Financial Advice Report July 2020.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 8
for Platform Managed Accounts functionality for the
5th year running.5 The use of managed portfolios
accelerated in FY21 with 44% of financial advisers now
using them to manage their clients’ investments and
allocations of new client inflows into managed portfolios
up from 12% on average in 2020 to 17%.6 Funds
Under Management (FUM) in managed portfolios in
Australia has grown to more than $95 billion as advisers
increasingly recognise the benefits of using them to
access professional investment management for their
clients.7 During FY21, HUB24 launched the Managed
Portfolio Academy to educate advisers on the adviser
and client benefits of managed portfolios and what to
look for when choosing a managed portfolio solution.
2. FINANCIAL PERFORMANCE
The Group’s preferred measure of profitability, which is
Underlying Earnings Before Interest, Tax, Depreciation,
Amortisation and Abnormal items (Underlying EBITDA),
increased 47% to $36.2 million for FY21 ($24.7 million
in FY20), with Underlying Net profit After Tax (Underlying
NPAT) up 53% to $15 million for FY21 ($9.8 million
for FY20).
They key drivers of the Group’s Underlying EBITDA
performance for FY21 were:
• Platform FUA growth from $17.2 billion as at 30 June
2020 to $41.4 billion as at 30 June 2021, an increase
of 141% with record net inflows of $8.9 billion
achieved during FY21, highlighting HUB24’s industry
leadership and continued development of strong
relationships
• Total Group Revenue increased by 34% to
$110.9 million which includes the continuing
businesses, Platform, Tech Solutions and
Corporate segment
• Platform Revenue increased by 36% to $101.1 million
for FY21 ($74.3 million for FY20) while platform
expenses grew by 39% to $63.2 million ($45.6 million
for FY20)
• Platform underlying EBITDA increased by 32%
to $37.9 million
•
Increased expenses were largely driven by total
headcount increasing by 49% to 391 (FY20: 263).
This included further investment in distribution,
technology, and operations staff to support growth
in FUA, expand our reach, and continue product
and technology innovation. The acquisitions of Ord
Minnett and Xplore also increased headcount by
85 (at 30 June 2021)
• The Group’s cost to income ratio improved from
69.5% FY20 to 67.1% in FY21 arising from scale
benefits partially offset by the RBA rate cuts which
reduced revenue by ~ $9 million in FY21
• PARS FUA grew to $17.2 billion during the year,
reflecting the growing market demand from
licensees and advisers for solutions to administer
non-custodial client assets, and realised through
the strategic acquisitions of Xplore and Ord
Minnett’s PARS.
Underlying Net Profit After Tax, being NPAT before
abnormal items, forms the basis of HUB24’s dividend
determination. This has increased by 53% to
$15.0 million in FY21. A statutory NPAT of $9.8 million
was recorded in FY21 after incurring $7.5 million of
transaction related costs ($8.2 million for FY20).
3. GROWTH
During FY21 the Company has delivered significant
growth and according to the latest available platform
market share data, HUB24 maintained second place for
both quarterly and annual net inflows, increasing market
share from 2.5% last year to 3.9% (including Xplore).8
HUB24 has now delivered a compound annual growth
rate of 66% in FUA over the last five years.
HUB24’s record organic FUA growth is a result of the
increased distribution footprint, product innovation
and customer service excellence. HUB24 has built
strong relationships across all segments of the market
including the growing mid-tier licensee segment, self-
licensed advisers, advice collectives, boutiques and
large national brokers.
This FY21, HUB24 signed 117 new licensee
agreements. Whilst actively pursuing new
relationships, our distribution team is also focussed
on working with our large national accounts and
their advisers to leverage existing strong growth
opportunities within their network. The number of
advisers using our platforms increased by 997, up
48.3% on the prior comparative period.9
FUA across our HUB24 Investor Directed Portfolio
Service (IDPS) and HUB24 Super product as of 30 June
5
6
7
Investment Trends Platform Analysis and Benchmarking Report 2021.
Investment Trends February 2021 Managed Accounts Report.
IMAP/Milliman Managed Accounts FUM Census December 2020.
8 Strategic Insights Platform Market Share Analysis March 2021.
9
Includes advisers from Xplore.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 9
2021 was 51% in IDPS and 49% in Super, the majority
of FUA on Xplore is held in an IDPS. The retail version of
the HUB24 platform now accounts for 78% of FUA, with
17.5% in customer branded white labels. During FY21,
HUB24 launched two new private label solutions for
large national licensees.
Overall, market conditions for HUB24’s value proposition
continue to present significant opportunity for
growth and our sales pipeline remains strong across
all segments. As a result, we will continue to invest
appropriately to take advantage of these opportunities.
4. OPERATIONS
With the COVID-19 pandemic still having a significant
impact on our community, maintaining the wellbeing
and effectiveness of our teams has remained a priority.
Our team has worked tirelessly to achieve our business
objectives and continue to deliver customer service
excellence during this period. Our management team
has played a significant role in leading the business
through this period of transformation and growth
whilst the pandemic has continued. Having effectively
mobilised our team to work remotely last year, we
continued to offer flexible working arrangements for all
employees throughout FY21, ensuring we could respond
quickly to changing restrictions across the country
as well as delivering flexibility which contributes to
employee satisfaction and wellbeing.
Throughout FY21 we have continued to make
enhancements to the platform to provide flexibility and
ensure advisers and their clients have access to a broad
range of investment options. This year we launched a
new digital onboarding experience as well as new ‘co-
browse’ functionality which enables our customer service
representatives to train advisers on new functionality
and provide faster resolution to queries.
HUB24 is committed to supporting licensees and
advisers through ongoing regulatory change. This
year we worked with licensees and advisers to deliver
a flexible approach to the new advice fee opt-in
requirements and are supporting licensees with
education for the requirements, arising from legal
obligations to comply with Distribution and Design
Obligations.
In October, the Company completed a project to
streamline our market leading managed portfolios by
moving them into a non-unitised managed investment
scheme, laying the foundations for future managed
portfolio innovation and providing additional client
benefits. As of 30 June 2021, managed portfolios
represented $18 billion of our FUA, representing a
19% market share.10
Providing advisers with product solutions and tools
to enable them to help their clients to meet their
retirement goals remains a priority. This year, we
integrated the Allianz Retire+ retirement product Future
Safe onto the HUB24 platform providing advisers with
access to Future Safe Reporting retirement tools and
resources through the adviser desktop and enabling
clients to view their Future Safe investments alongside
other investments on the platform.
Following a pilot program with a group of advisers,
BlackRock’s iRetire tool was rolled out to the HUB24
adviser base through the HUB24 adviser desktop.
iRetire by BlackRock supports advisers in retirement
outcome conversations with their clients by
demonstrating their portfolio today against their future
needs, and how they can start to close their retirement
income gaps.
During FY21, the Company worked with two large
licensee clients to launch our first private label offerings.
In May, the bulk transition of $1.4 billion in FUA was
completed from ClearView Wealth across to the new
ClearView Wealth private label solution on HUB24. In
December, HUB24 entered into an agreement with IOOF
to develop a range of solutions including an investment
and superannuation wrap platform utilising HUB24’s
custody, administration and technology capabilities and
a suite of managed portfolios. This offer was launched to
the IOOF network of advisers in Q4 FY21.
We also welcomed both the Ord Minnett PARS and
Xplore teams to HUB24 during the year. The acquisition
of Ord Minnett’s PARS was completed at the end of
November which together with acquisition of Xplore,
facilitated HUB24’s entry to this segment and work is
underway to transition PARS from Ord Minnett systems
to HUB24. This expected to be completed by the end
of Q2 FY22.
The acquisition of Xplore Wealth was completed in
March. Distribution, product and compliance teams have
been integrated and we are leveraging our collective
capability to progress the development of product
solutions for existing and new clients.
As part the strategic investment in Easton, a Technology
and Partnership Distribution agreement is in place,
under which HUB24 will collaborate with Easton to
develop product solutions which leverage HUB24’s data
and technology expertise.
10 IMAP/Milliman Managed Accounts FUM Census December 2020.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 10
During FY22 licensee, adviser and client data and
technology solutions were aligned under the
HUBconnect banner. Products and services delivered
under HUBconnect leverage HUB24’s data and
technology expertise to deliver innovative solutions
to solve common challenges faced by licensees and
advisers to enable affordable financial advice for more
Australians.
The HUBconnect team have been working with a
group of licensees to better understand their
business challenges and to provide the data they
need to run more efficient businesses and replace
the manual processes that increase the cost of
advice. HUBconnect Insight provides a range of
solutions that take unstructured data sources and
advice documentation from advice practices and
format it, to deliver efficiencies for licensee business
management activities for example monitoring key
risk indicators or remuneration reporting. A pilot
program is underway with four licensees and the
capability will be rolled out to other licensees during
FY22, including Easton as part of the Technology
and Partnership Agreement.
5. CORPORATE GOVERNANCE
Throughout a busy and successful FY21, HUB24’s Board
of Directors and Management remained committed to
maintaining and enhancing a robust system of corporate
governance.
The ongoing review and improvement of corporate
governance practices and processes are important
aspects of business and ensuring HUB24 maintains
industry best practice including our reporting,
commitment to diversity and expanding the skillset
across the Board.
As the Company grows, we continue to invest in
our corporate governance, risk and compliance
frameworks to develop and articulate our ESG
principals to ensure they are fit for purpose and
commensurate with not just the present demands but
for our growth trajectory.
In March, Mr Ian Litster retired from the Board, we
would like to thank him for his many years of service.
An extensive search was undertaken for a new Director
and in July 2021, we announced the appointment of Ms
Catherine Kovacs as Non-Executive Director. Ms Kovacs
has broad financial services experience spanning
fintech, business strategy and growth, and investments
including M&A.
6. OUTLOOK
HUB24 is proud to have delivered an extremely
successful year, achieving record levels of platform net
inflows, and FUA growth as well as the completion of
three strategic transactions and continued industry
recognition as a market leader in both the platform and
managed portfolios space. Shareholder value has grown
significantly in recognition of our strong financial and
operating performance.
These results have been delivered in the context of a
global pandemic and are underpinned by the continued
investment in our technology, the strength of our offer
and the expertise and commitment of our team to
continue to deliver outcomes for our customers and
shareholders.
Despite the sustained pandemic conditions, we believe
the market conditions continue to be highly favourable for
HUB24 as the wealth management industry continues to
transform. As a result of our continued investment and
the completion of strategic transactions this year, we are
well-placed to pursue emerging opportunities and growth
in all segments of our business, as we lead the industry
as the best provider of integrated wealth platform,
technology and data solutions.
To leverage these opportunities, HUB24 will focus
on delivering initiatives that provide customer value
and growth. We will continue to invest and build the
platform of the future, and collaborate with licensees,
advisers and other wealth industry providers to deliver
technology and data solutions to shape the future of
the industry.
Moving forward we expect ongoing strong net inflows to
the platform and are now targeting a Platform FUA range
of $63–$70 billion by 30 June 2023 (excluding PARS FUA).
We look forward to speaking with shareholders at the
Annual General Meeting and on behalf of the Directors
wish to thank our customers for their support as well
as our talented and focussed team for their ongoing
commitment to both our customers and HUB24.
Yours sincerely,
Bruce Higgins
Chairman
Andrew Alcock
Managing Director
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 11
DIRECTORS’
REPORT
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
12
Your Directors present their
report together with the
financials statements, on the
Consolidated Group (referred
to hereafter as “the Group” or
“HUB24”) consisting of HUB24
Limited (referred to hereafter as
“the Company”) and the entities
it controlled for the full year
ended 30 June 2021 (“FY21”).
In order to comply with the provisions of the
Corporations Act 2001, the Directors report as follows:
BRUCE HIGGINS
B Eng CP Eng, MBA, FAICD
INFORMATION ON DIRECTORS
DIRECTORS
The following persons were Directors of the Company,
from the beginning of the financial year and up to the
date of this report, unless otherwise stated:
Mr Bruce Higgins (Chairman)
Mr Andrew Alcock (Managing Director)
Mr Ian Litster (resigned 5 March 2021)
Mr Anthony McDonald
Mr Paul Rogan
Ms Ruth Stringer
Ms Catherine Kovacs (appointed 19 July 2021)
COMPANY SECRETARIES
Ms Kitrina Shanahan (appointed 7 September 2020)
Mr Andrew Brown (appointed 30 April 2021)
Ms Debbie Last (resigned 6 September 2020)
Mr Paul Howard (resigned 18 December 2020)
Chairman and Non-Executive Director
Bruce has more than 20 years experience as a senior
executive or CEO, with companies such as Honeywell,
Raytheon and listed technology companies. He is a
specialist in rapid growth entrepreneurial companies,
financial and software services companies, M&A and
corporate governance and has also served on ASX boards
as a Non-Executive Director or Chairman for over 15 years.
Bruce was awarded the Ernst & Young Entrepreneur
of the Year award in Southern California in 2005 and
has a Bachelor Degree in Electronic Engineering and
an MBA in Technology Management. He is a Chartered
Professional Engineer and Fellow of the Australian
Institute of Company Directors.
Bruce was appointed as Chairman of the Board on
19 October 2012.
Previous listed company directorships held in the last
three years:
• Legend Corporation Limited (resigned 30 August 2019)
• Novita Healthcare Limited (resigned 10 May 2018).
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 13
ANDREW ALCOCK
B Bus, GAICD
Managing Director
RUTH STRINGER
B Sc, LLM, GAICD
Non-Executive Director
Andrew has more than 25 years experience across
wealth management encompassing advice, platforms,
industry superannuation, insurance and information
technology. Andrew was formerly Chief Operating Officer
of Genesys Wealth Advisers overseeing the authorisation
of over 300 financial planners and Head of the Genesys
Equity Program, where he was a director of over 20
financial planning practices across Australia.
Prior to this Andrew was CEO of Australian
Administration Services, a subsidiary of Link Market
Services, providing superannuation administration for
some of Australia’s largest superannuation funds. He
was also previously General Manager for Asteron’s
wealth management business.
Andrew’s extensive financial services experience solidly
underpins his role as Managing Director of HUB24 Limited.
Andrew was appointed to the Group’s Board on
29 August 2014 as Managing Director.
Previous listed company directorships held in the last
three years:
• Nil.
Ruth is an experienced financial services lawyer
with particular expertise in funds management,
superannuation, life insurance and financial planning.
Her diverse career has included working in significant
national and international law firms, as well as serving as
in-house counsel with various financial institutions and
more recently, working with the Australian Securities
and Investments Commission. Ruth is engaged as a
Consultant to Herbert Smith Freehills.
Ruth has served on a number of boards and
committees during her career including the Board of
Taxation’s Advisory Panel and the Steering Committee
of the International Pension and Employee Benefit
Lawyers Association. Ruth’s passion for improving the
superannuation system resulted in her appointment
to the CIPR (Comprehensive Income Products for
Retirement) Framework Advisory Group formed to
advise Treasury on aspects of the legislative framework
for new retirement income products.
Ruth was appointed to the HUB24 board on 1 February
2020 and also serves on the Audit, Risk and Compliance
Committee.
Previous listed company directorships held in the last
three years:
• Nil.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 14
ANTHONY MCDONALD
B Comm LLB
PAUL ROGAN
FAICD, FCPA, B Bus
Non-Executive Director
Non-Executive Director
Paul is a senior financial services professional with a
background in Accounting and Finance with a proven
track record for delivering results in different regions
and markets. In his executive career he successfully
drove businesses through rapid growth phases including
with Challenger, NAB, MLC, and Lend Lease.
Paul has more than 27 years experience serving on
entity boards and industry groups including 13 years
in the not for profit sector. Paul was appointed to the
HUB24 Limited board on 20 December 2017 and
appointed as Chair of the Audit, Risk and Compliance
Committee on 1 March 2018. Paul was appointed
a member of the Remuneration and Nominations
Committee effective 1 August 2020.
Previous listed company directorships held in the last
three years:
• Nil
Anthony co-founded financial planning firm Snowball
Group Limited in 2000, which merged with Shadforth in
2011 to become ASX-listed SFG Australia Limited.
Anthony is also a former director of The Investment
Funds Association of Australia (now Financial Services
Council) and currently Chairman of a leading not-
for-profit organisation. He is currently non-executive
director of 8IP Emerging Companies Limited and was
appointed as non-executive director of URB Investments
Limited on 13 October 2016.
As a financial services executive Anthony worked in a variety
of senior roles with the Snowball Group, SFG, Jardine Fleming
Holdings Limited (Hong Kong), and Pacific Mutual Australia
Limited. Prior to entering the financial services industry,
Anthony worked as a solicitor with two global law firms. He
holds a Bachelor of Laws (LLB) and a Bachelor of Commerce
(Marketing) from the University of NSW.
Anthony was appointed to the HUB24 board on
1 September 2015 and is the Chair of the Remuneration
and Nomination Committee.
Previous listed company directorships held in the last
three years:
• 8IP Emerging Companies Limited (appointed
24 September 2015, resigned 1 April 2021)
• URB Investments Limited (appointed 13 October 2016,
resigned 23 December 2019)
• Easton Investments Ltd (appointed 1 February 2021).
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 15
CATHERINE KOVACS
B.Comm , MAppFin, GAICD
Non-Executive Director
IAN LITSTER
B Sc (Hons)
Non-Executive Director
Catherine has over 30 years’ experience in the
financial services industry, having held senior executive
leadership roles at Westpac Banking Group, Ellerston
Capital, Macquarie Group and BT Financial Group.
Catherine’s most recent executive role was as Group
Head of Business Development at Westpac until March
2019, where she was responsible for advising the
Westpac Executive Committee and Board on business
disruption and the future of banking and wealth strategy,
as well as managing strategic partnerships.
Catherine is a Graduate of the Australian Institute of
Company Directors and a Member of the Association of
Superannuation Funds of Australia. She holds a Bachelor
of Commerce (UNSW) and a Master of Applied Finance
(Macquarie University).
Catherine was appointed to the Board on 19 July 2021.
Previous listed company directorships held in the last
three years:
• OFX (appointed 22 February 2021).
Ian has more than 14 years experience in designing
and developing software for the financial services
industries, particularly in the area of financial planning.
He has been the founder of the companies behind
the VisiPlan and COIN software packages, two of the
leading financial planning systems in Australia. His main
areas of expertise are the management of information
technology organisations and software development.
Ian has a Bachelor Degree in Science (Honours in
Mathematics).
Ian was appointed to the Board on 25 September 2012
and resigned on 5 March 2021.
Previous listed company directorships held in the last
three years:
• Nil.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 16
COMPANY SECRETARY
The name and details of the Company Secretaries in
office during the 2021 financial year and at the date of
this report are as follows:
KITRINA SHANAHAN
CIMA, CPA, AGSM MBA
ANDREW BROWN
Diploma in Law, FCG, MAICD
Company Secretary and Chief Financial Officer
Company Secretary
Kitrina has over 20 years of experience in finance,
governance and risk. Prior to HUB24, Kitrina was Chief
Financial Officer Insurance at Westpac. She has also held
roles across BTFG as Deputy Chief Financial Officer and
as Group Financial Controller at Westpac. With deep
experience in platforms, advice and broader financial
services, Kitrina has executive leadership experience
delivering large strategic transformation projects.
Andrew has extensive experience in the financial
services industry and was appointed to the position of
Company Secretary on 30 April 2021. Prior to joining
the Company, Andrew held senior governance and
compliance management positions at Challenger
Limited.
Previous listed company directorships held in the last
three years:
Previous listed company directorships held in the last
three years:
• Nil.
• Nil.
Kitrina was appointed Company Secretary and Chief
Financial Officer on 7 September 2020.
Andrew was appointed Company Secretary on
30 April 2021.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 17
PAUL HOWARD
B Comm LLB, GAICD
Company Secretary
Paul was appointed Company Secretary on 31 July 2019
and resigned on 18 December 2020.
DEBBIE LAST
B COMM, CA
Company Secretary and Interim Chief Financial Officer
Debbie has over 25 years experience in governance,
risk, strategy implementation, finance and process
improvement in the financial services sector, bringing
industrial strength together with commercial outcomes
to growing businesses.
Debbie has held senior positions including CFO of NAB
Asset Management, a business within NAB Wealth with
over $123 billion in funds under management across
listed and unlisted asset classes, and was also a director
of a number of nabInvest related entities. She was also
a partner of PwC Australia and KPMG London. Debbie
holds a Bachelor of Commerce from the University of
Melbourne and is a Chartered Accountant.
Previous listed company directorships held in the last
three years:
• Mainstream Group Holdings Ltd.
Debbie was appointed Company Secretary and Interim
Chief Financial Officer on 5 March 2020 and resigned on
6 September 2020.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 18
GROUP OVERVIEW
HUB24 Limited ABN 87 124 891 685 (HUB24, HUB, the
Group or the Company) is a financial services company
that was established in 2007 and is a leading provider
of wealth management superannuation investment
platforms, technology and data solutions to the
Australian market.
Initial products were launched to market from 2010
growing to $1 billion in Funds Under Administration
(FUA) in 2014. Since that time the business has grown
to over $58.6 billion in FUA (as at 30 June 2021)
and employs 391 people on a full-time equivalent
(FTE) basis.
HUB24’s head office is based in Sydney and operates in
all Australian states and territories.
HUB24 is listed on the Australian Securities Exchange
(ASX) under the code ‘HUB’. HUB24’s market
capitalisation was approximately $1.7 billion as at
4 August 2021.
PRINCIPAL ACTIVITIES
HUB24 operates via two core revenue generating
segments and a Corporate segment as shown in the
diagram below:
HUB24 Limited
(ASX: HUB)
Platform
Tech Solutions
Corporate
Agility Pty Ltd
HUBconnect
Pty Ltd
Group support
functions
Strategic
investments
Treasury
HUB24
platform
Xplore Wealth
platform
Portfolio
Administration
& Reporting
Services (PARS)
PLATFORM
The Platform segment comprises the HUB24 investment
and superannuation platform (HUB24 platform), the
Xplore Wealth investment and superannuation platform
(Xplore Wealth platform) and Portfolio Administration &
Reporting Services (PARS).
The HUB24 and Xplore Wealth platforms are used by
financial advisers to efficiently administer their clients’
investments by providing custodial services, and PARS
is a non-custody portfolio service which provides
administration, corporate action management and
tax reporting services for stockbrokers and financial
advisers.
HUB24’s platform offers broad product choice and a
market-leading experience for advisers and their clients.
In February 2021, HUB24 was announced as the Best
Platform Overall, and having the Best Platform Managed
Accounts Functionality for the 5th year running by
Investment Trends in the 2020 Platform Competitive
Analysis and Benchmarking Report. It serves a growing
number of respected and high-profile financial services
companies.
The Xplore Wealth platform, acquired by HUB24
in March 2021, consolidates HUB24’s leadership
position as a Specialist Platform Provider (SPP) and
brings complementary capabilities including managed
accounts, superannuation services and PARS. Xplore’s
products and services are used by financial advisers,
boutique financial advice businesses, stockbrokers
and institutional clients to look after their clients
investment needs.
In December 2020, HUB24 acquired the servicing rights
to Ord Minnett Pty Limited’s PARS. This acquisition
included software, related intellectual property and the
transition of an experienced team of 12 FTE.
The PARS capability acquired via the Xplore Wealth
and Ord Minnett transactions facilitated HUB24 now
being a leader in the non-custodial asset administration
segment.
TECH SOLUTIONS
HUB24 provides technology and data services
through HUBconnect Pty Ltd (HUBconnect) and Agility
Applications Pty Ltd (Agility).
Tech Solutions provides technology and data services
to the wealth industry, bringing innovative solutions to
support licensees, advisers and stockbrokers to deliver
services to their clients. The technology solutions division
benefits from Agility’s years of experience of managing
data for an established customer base.
HUB24 is a strategic shareholder in Easton Investments
Limited (Easton) which is a diversified financial services
business servicing the needs of financial advisers
and accountants. Under a Technology Partnership &
Distribution agreement Easton is a cornerstone client for
HUBconnect’s data and technology services.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 19
REVIEW AND RESULTS OF OPERATIONS
UNDERLYING NET PROFIT AFTER TAX
The key items regarding the Group performance for
FY21 were:
FUNDS UNDER ADMINISTRATION
• Total Funds Under Administration (FUA) of
$58.6 billion ($17.4 billion at 30 June 2020,
an increase of 237%)
• Platform1 FUA growth from $17.2 billion at
30 June 2020 to $41.4 billion at 30 June 2021,
an increase of 141%
• PARS2 FUA was $17.2 billion at 30 June 2021 with
$9 billion relating to the Ord Minnett PARS transition
and $6 billion relating to Xplore transition, which were
completed during the period.
INCOME
• The Group recorded a 34% increase in total income3
to $110.9 million for FY21 ($82.5 million for FY20)
Underlying Net Profit After Tax4 from continuing
operations (which forms the basis of the Group’s
dividend payout policy) represents NPAT before abnormal
items. Underlying Net Profit After Tax increased 53% to
$15.0 million for FY21 ($9.8 million in FY20).
Abnormal items of $8.1 million ($1.8 million for FY20)
include $7.5 million in transaction and due diligence
and implementation costs in relation to the strategic
transactions of acquiring Ord Minnett’s PARS business,
Xplore, the investment in Easton, and the divestment
of the Licensee Paragem and $0.6 million in relation
to the implementation of Private Label capability for
both ClearView and IOOF and finalising the transfer of
the Group’s management portfolio into a Management
Investment Scheme (MIS). Partially offsetting the
abnormal items is a $1.6 million fair value gain on
contingent consideration offset by the recognition of
$1.6 million of share based payments for the purchase
of Agility Applications Pty Ltd and the $1.4 million gain
on sale of Paragem.
• Platform operating revenue increased by 36% to
$101.1 million for FY21 ($74.3 million for FY20)
STATUTORY NPAT
• Ord Minnett and Xplore, acquired during the year,
contributed $9.8 million of revenue.
Statutory Net Profit After Tax (NPAT) was up 20% to
$9.8 million for FY21 ($8.2 million for FY20).
EBITDA
CASH FLOWS
• The Group’s preferred measure of profitability is
Underlying Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) and abnormal items,
which increased by 47% to $36.2 million for FY21
($24.7 million in FY20)
• On a continuing operations basis, the Group’s
Underlying EBITDA (refer to note 5) increased 46%
to $36.7 million for FY21 ($25.2 million in FY20)
• This Underlying EBITDA performance included
Platform expenses (direct and operating expenses)
increasing by 39% to $63.2 million ($45.6 million
for FY20).
The Group recorded a 24% decrease in net cash
flow from operating activities to $19.2 million for FY21
($25.3 million for FY20). Net underlying cashflow from
operating activities was up 3% to $26.4 million (FY20:
$25.7 million) when adjusted for the abnormal costs of
$7.2 million.
In addition to the information disclosed in this Annual
Report, readers are referred to the Group’s disclosures
to the ASX on 24 August 2021 for further details and
analysis of the Group’s performance and financial
position.
1 Platform FUA refers to the custodial portfolio.
2 PARS FUA refers to the non-custodial portfolio.
3 Group income includes operating revenue, fair value gain on
contingent consideration, interest and other income. Refer to the
Consolidated Statement of Profit or Loss and Other comprehensive
income.
4 Underlying Net Profit After Tax excludes the fair value gain on
deferred consideration, the Agility consideration share based
payments, gain on sale of investment, strategic transactions and
implementation costs and other abnormal items.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 20
Reconciliation of Underlying NPAT
to Statutory NPAT
Underlying NPAT1
Fair value gain on contingent consideration
Agility consideration share based payment expense
Impairment of Agility CGU
Gain on Sale of Investment
Strategic transaction due diligence and implementation costs
Other abnormal costs
Tax effects
Statutory NPAT
Year ended
30 June 2021
$ million
Year ended
30 June 2020
$ million
15.0
1.6
(1.6)
1.4
(7.5)
(0.6)
1.5
9.8
9.8
0.9
0
(1.0)
-
0
(1.8)
0.3
8.2
1 Underlying NPAT for FY20 has been restated to remove the tax effect of abnormal items.
CORPORATE
Strategic transactions
During the year ended 30 June 2021 the Group
completed three strategic transactions and the sale of
the Licensee business.
On 28 November 2020, HUB24 Limited completed the
acquisition of PARS. See note 30 for more information.
On 1 February 2021 the Group completed a
proportional takeover of Easton. This investment is
recognised as an investment in associate on the balance
sheet. See note 26 for more information.
On 2 March 2021, the Group completed the acquisition
of Xplore. See note 30 for more information.
The Group sold its licensee business, Paragem Pty Limited,
to Easton Investments Limited on 1 February 2021. The
transaction included a capital return of $3.2 million and the
Group received 3,333,333 shares in Easton Investments
Limited as consideration for the sale. An accounting gain of
$1.4 million has been recognised in FY21.
Capital management initiatives
On 29 October 2020, the Group announced that it had
successfully completed a $50 million fully underwritten
placement of 2.5 million new fully paid ordinary shares
to institutional and sophisticated investors at a price of
$20 per new share.
On 25 November 2020, the Group announced 1 million
new fully paid ordinary shares would be issued on
30 November 2020 at a price of $20 per new share
under a non-underwritten share purchase plan (SPP) to
eligible shareholders raising an additional $20 million in
capital. The actual number of shares issued was 999,999
for a value of $19,999,980.
The Group secured an additional ANZ loan facility for
$12.5 million amortising over 3 years which was fully
drawn down on the 18 February 2021. This is in addition
to the $5m overdraft (undrawn) the Group has with ANZ.
During FY21 the Group purchased $5 million
additional treasury shares to service the Group’s
Employee Share Plans.
See notes 15 and 18 for more information.
Options and performance rights
The following options, performance rights and shares
were issued in accordance with plans approved by
shareholders. These awards contain ambitious targets,
including FUA targets of up to $70 billion by FY255, in
order to retain, incentivise and align key staff towards
HUB24 achieving its strategic objectives:
• 91,384 share options were issued to staff and
executives in the financial year ended 30 June 2021
(331,332 in FY20)
• 1,130,667 performance award rights were issued to
staff, executives and directors in the financial year
ended 30 June 2021 (132,680 in FY20)
• 531,519 shares were issued for options exercised by
staff and executives in the financial year ended
30 June 2021 (441,182 in FY20)
• 65,296 shares were issued for performance award
rights earned by staff and executives in the financial
year ended 30 June 2021 (75,533 in FY20).
5
In measuring the achievement of performance and FUA targets, the
Board reserved the right to vary the percentage of options and ordinary
performance rights which may vest as well as the FUA dollar thresholds to
account for acquisitions of businesses, assets, companies or other entities
which may be undertaken by the Group during the performance period
and adjust for non-custodial FUA on a proportionality basis
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 21
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
COVID IMPACT
Apart from the strategic transactions mentioned
previously, there have been no other significant changes
in the nature or state of affairs of the consolidated Group.
DIVIDENDS
Subsequent to the end of the year, the directors
have determined a final dividend of 5.5 cents per share
fully franked to be paid on 15 October 2021.
Together with the fully franked interim dividend of
4.5 cents per share, the fully franked full year dividend
of 10.0 cents per share (FY20 7.0 cents per share)
represents a 43% increase in dividends for the year and
a payout ratio of 45% of Underlying NPAT (FY20 45%).
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
As disclosed above, subsequent to year end, the
Directors have determined a fully franked final
dividend of 5.5 cents per share (a fully franked
dividend of 3.5 cents per share final dividend was
determined in FY20).
Catherine Kovacs was appointed as a Non Executive
Director to the Board on 19 July 2021.
The Group has increased the loan to HTFS Holdings
Pty Ltd by $3.6 million, who had in turn used it to
subscribe for capital in HTFS Holdings Nominees
Pty Ltd, a wholly owned subsidiary of EQT Holdings
Limited (ASX:EQT), which is the Trustee for the
HUB24 Super Fund (the Fund). The loan agreement
is entered into on an arm’s length basis and on
commercial terms at an interest rate of 10% per
annum. The capital received by the Trustee is
reserved for the purpose of meeting the Operational
Risk Financial Requirement (ORFR) for the Fund in
accordance with APRA Prudential Standard SPS114.
No other significant matter or circumstance has arisen
since 30 June 2021 that has significantly affected, or may
significantly affect the Group’s operations, the results of
those operations, or the Group’s state of affairs in future
financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
With the continued growth in FUA and continuing
success of its supporting businesses and strategic
transactions, the Group expects its financial results to
continue improving with scale.
The COVID-19 outbreak was declared a pandemic by the
World Health Organisation in March 2020. The outbreak
and response of governments in dealing with the
pandemic has impacted the community and economy.
The duration of these developments remains uncertain
as at the date of this report.
Even though many industries in Australia have been
impacted by the COVID-19 pandemic, HUB24 remains
in a solid financial position, operating profitably with
cash reserves significantly above regulatory capital
requirements and generating strong operating cashflow.
The Company has not entered into any deferred
payment arrangements and is not reliant on any
government or third party concessions in relation
to the COVID-19 pandemic.
The Group has realised record custodial net inflows
of $8.9 billion for FY21, suggesting that advisors have
adapted to the COVID-19 environment. Given the
ongoing opportunities for growth the Company remains
focused on investing for the future and delivering our
strategic objectives.
Net flows have proved to be resilient, our new business
pipeline remains strong and assisted FUA transitions
are continuing. HUB24’s priority has been, and remains,
ensuring the health and safety of the team whilst
continuing to operate our business to meet the needs of
licensees, advisers and their clients as well as other key
stakeholders.
Our estimates and assumptions have been prepared
based upon conditions existing at the date of this report.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group’s operations are not subject to significant
environmental regulations under Australian legislation in
relation to the conduct of its operations.
DIRECTORS’ INDEMNITY
During FY21 the Group paid a premium in respect
of insuring all directors and officers against liability,
except wilful breach of duty, of a nature that is
required to be disclosed under section 300(8) of the
Corporations Act 2001. In accordance with commercial
practice, the amount of the premium has not been
disclosed.
The Group has indemnified officers and directors
to the extent permitted by law against any liability
that arises as a result of actions as an officer or
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 22
director and has not otherwise, during or since the
end of FY21, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or
auditor of the Group or of any related body corporate
against a liability incurred as such an officer or
auditor.
MEETINGS OF DIRECTORS
The numbers of meetings of the Group’s board of
Directors and of each board committee held during the
year ended 30 June 2021, and the numbers of meetings
attended by each Director were as per the table below:
Board
meetings
Audit, risk & compliance
committee meetings
Remuneration &
nomination committee
meetings
Director
Attended
Held
Attended
Held
Attended
Held
Mr Bruce Higgins (Chairman)
Mr Andrew Alcock (Managing Director)
Mr Ian Litster (resigned 5 March 2021)
Mr Anthony McDonald
Mr Paul Rogan
Ms Ruth Stringer
Ms Catherine Kovacs
13
13
9
13
13
13
-
13
13
10
13
13
13
-
7
-
-
-
7
7
-
7
-
-
-
7
7
-
4
-
1
4
3
-
-
4
-
2
4
3
-
-
This report is made in accordance with a resolution
of Directors.
Mr Bruce Higgins (Chairman)
Director
Sydney
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 23
REMUNERATION
REPORT
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
24
CONTENTS OF THE REMUNERATION REPORT
1
2
3
4
5
6
7
8
9
Key Management Personnel (KMP)
Remuneration snapshot
Business performance
Executive remuneration outcomes
Executive remuneration structure
KMP service agreements
Non-executive Director (NED)
remuneration
Remuneration governance
Other statutory disclosures
28
28
30
31
36
39
39
41
42
This Remuneration Report (on pages 25–45) sets out HUB24’s remuneration framework and details of remuneration
outcomes for key management personnel (KMP) for the year ended 30 June 2021 (FY21).
Accounting standards define KMP as those executives and non-executive directors with the authority and responsibility
for planning, directing and controlling the activities of HUB24, either directly or indirectly.
The FY21 Remuneration Report has been prepared and audited in accordance with the disclosure requirements of the
Corporations Act 2001.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 25
REMUNERATION REPORT
TO OUR SHAREHOLDERS
On behalf of the Board and its Remuneration and
Nomination Committee, I am pleased to present
HUB24’s FY21 Remuneration Report.
During FY21, we undertook a review of the structure
and style of our Remuneration Report to improve
overall disclosure and readability. We trust this assists
shareholders to more readily evaluate the links between
performance and remuneration outcomes.
HUB24’s remuneration approach focuses on setting
challenging targets that are aligned to our broader
strategic objectives and are designed to motivate
executives to deliver strong performance over the short,
medium and longer term. As we grow, we are committed
to providing market competitive remuneration that
retains our executive talent who are critical to HUB24’s
continued success.
OUR RESPONSE TO A RAPIDLY CHANGING MARKET
The market in which we operate continued to experience
rapid and fundamental change. We pride ourselves
on being a dynamic organisation that responds to this
change and adopts a strategy that seeks to enhance
shareholder value by capitalising on the shifts occurring
throughout our industry. FY21 was characterised by
strong organic growth as well as strategic M&A activity
and integration that stretched management while
delivering enhanced shareholder returns and set up a
sound platform for future growth.
OUR RESPONSE TO COVID-19
This year, COVID-19 has again had a significant
impact on the broader Australian community. We
are extremely proud of all our employees who have
worked tirelessly to achieve our strong results and
who continue to deliver high quality service to our
clients over this period. Additionally, we would like
to acknowledge the role our management team
has played to lead the business through a period
of significant transformation and growth whilst the
COVID-19 pandemic has continued. This year, we again
placed a high priority on keeping our employees safe
and supporting their wellbeing throughout the ongoing
“We are proud of our FY21
performance in a year where
we achieved record growth
by executing on our strategy,
delivering increased market
share, great customer outcomes
and capitalising on a rapidly
changing market whilst
navigating COVID.”
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 26
uncertainty presented by the pandemic. Having
effectively and quickly mobilised all team members to
work remotely last year, we continued to offer flexible
working arrangements for all employees throughout
FY21. This allowed us to respond with agility to
changing restrictions across the country as well as
delivering flexibility to our employees which we know
is highly valued and contributed to overall employee
satisfaction and wellbeing. To ensure ongoing
connection and interaction between our people whilst
operating with a remote workforce, we redesigned
our onboarding and induction programs and internal
communications to be delivered virtually.
We continued this year to support our people through
the personal impacts of COVID-19 restrictions,
broadening our Employee Assistance Program to
include immediate family members and creating
greater flexibility where required to support individual
circumstances.
Considering the frequent disruption throughout the
year, we are proud of our success in balancing employee
welfare and business results which has allowed us to
operate effectively and efficiently without accessing
JobKeeper or any other government subsidy.
PERFORMANCE DURING FY21
Despite challenging market conditions, FY21 was
a landmark year for HUB24 with strong outcomes
achieved for our customers, our employees and our
shareholders. We had a record amount of Platform FUA
at $58.6 billion which is up 141% since last year and
platform annual net flows of $8.9 billion. We established
PARS in the last year via acquisition, achieving
$17.2 billion. Our strategic transactions this year
included the successful completion of the acquisitions
of Xplore Wealth Limited and Ord Minnett Pty Ltd PARS,
a 31.5% investment in Easton Investments Limited
(Easton) and the sale of Paragem Pty Ltd to Easton.
In addition, we completed the launch of our Managed
Portfolio Academy and private labels for ClearView
Wealth Limited and IOOF Holdings Limited.
Our performance has translated to strong outcomes
for our shareholders, delivering full year dividends of
$0.10 up 43% on FY20, combined with 207% share price
growth over the financial year. Our underlying profit also
increased to $15.0 million.
Financial advisers have also rated our platform first
for Overall Satisfaction in the 2021 Wealth Insights
Platform Service Level Report and we were also
awarded the Best platform for Managed Accounts
functionality for the fifth year running which recognises
our commitment to customer service excellence and
innovative product solutions.
As we look ahead to FY22, we are focussed on achieving
sustainable growth that benefits our employees,
customers and shareholders. We are committed to
enabling Australians to receive cost-effective advice that
empowers better financial futures and being the leading
provider of integrated platform, technology and data
solutions to the wealth industry.
2021 REMUNERATION OUTCOMES
In late FY20, the Board engaged external advisers to
undertake a review of the remuneration mix and levels
for Executive KMP relative to the market following a
period of agreed fixed remuneration freeze. Following
assessment of this data, fixed remuneration changes
for KMP were awarded effective 1 December 2020
to ensure that HUB24’s remuneration remained
competitive and supported the ongoing retention of key
Executives.
The Board set challenging targets for the FY21 STI to
drive business operations, financial performance and
maximise shareholder value. Our FY21 STI performance
measures included financial, operational and individual
strategic measures, based on the key metrics used to
assess HUB24’s success over the short-term. For the
Managing Director, all base targets were exceeded
in FY21, with the stretch target achieved in full for
progress against strategy and growth objectives. KMP
performance outcomes against scorecard deliverables
ranged from 91% to 96%, reflecting a very strong
performance year.
The outcomes of the FY18 LTI grant for Executive KMP
and other key senior leaders reflect our strong business
performance, critical retention priorities and recognition
of unique functional expertise or knowledge. LTI was
offered to Executive KMP as a mix of options (40%) and
performance rights (60%) with a 3-year performance
period.
At the FY20 AGM, a grant of a special equity award was
approved by shareholders for the Managing Director.
A similar award was made to a small number of key
executives, in addition to the annual LTI plan. These
awards were granted to recognise the importance
of the Managing Director and key people in the
successful delivery of HUB24’s strategy over the long-
term, and to retain key executives through a period of
significant change in the industry. These awards will
only vest where significant growth is achieved against
challenging FUA targets over a period of five years.
To further leverage the retention impact, the Special
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 27
PARs grants were made in exchange for longer notice
periods for each key executive, which are now set at
12 months.
BOARD AND EXECUTIVE KMP CHANGES
In FY21, HUB24 welcomed the appointment of Kitrina
Shanahan as our Chief Financial Officer and Joint
Company Secretary effective 7 September 2020. Kitrina
brings a wealth of experience in platforms, advice and
broader financial services. We thank Debbie Last for her
dedication to the role of interim CFO and Joint Company
Secretary during the last year.
We also farewell Ian Litster and thank him for his
unwavering commitment to the Board over the last
nine years and his efforts in developing the HUB24
platform. Between the end of FY21 and the release
of this Report, we are also delighted to welcome
Catherine Kovacs to HUB24’s Board effective 19 July
2021 who brings deep experience in financial
services and furthers our aspiration to increase
female representation on the Board.
LOOKING AHEAD TO FY22
Over the last few years, HUB24 has grown rapidly
to an S&P/ASX 200 listed company. Our executive
remuneration framework has been reflective of our
origins as a smaller company while still ensuring we
attract and retain top-tier executive talent. During FY21,
the Board engaged external advisors to undertake a
comprehensive remuneration review and to provide
market benchmarking information on contemporary
remuneration practices and remuneration trends.
The Board continues to consider this information in
light of the changing regulatory landscape, particularly
in the financial services sector, to ensure HUB24’s
executive remuneration framework remains relevant
and fit-for-purpose.
We trust the FY21 Remuneration Report assists
shareholders to more readily assess our remuneration
philosophy, framework and alignment. We remain
committed to continuous improvement and to
open communication with shareholders and other
stakeholders, particularly around our remuneration
practices and disclosures. As such, we welcome any
feedback that you may have.
Regards,
Anthony (Tony) McDonald
Chair, Remuneration and Nomination Committee
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
28
1. KEY MANAGEMENT PERSONNEL
The KMP for FY21 were:
Name
Role in FY21
Non-executive Directors (NEDs)
Bruce Higgins
Non-Executive Director, Chairman
Anthony McDonald
Non-Executive Director
Paul Rogan
Non-Executive Director
Ruth Stringer
Non-Executive Director
Ian Litster
Non-Executive Director
Catherine Kovacs
Non-Executive Director
Executive KMP
Andrew Alcock
Managing Director
Jason Entwistle
Director, Strategic Development
Craig Lawrenson
Chief Operating Officer
Term as KMP in FY21
Full year
Full year
Full year
Full year
Part year – retired 5 March 2021
Commenced 19 July 2021
Full year
Full year
Full year
Kitrina Shanahan
Chief Financial Officer and Joint Company Secretary
Part year – commenced 7 September 2020
Debbie Last
Interim Chief Financial Officer and Joint Company Secretary
Part year – ceased 6 September 2020
2. REMUNERATION SNAPSHOT
Our remuneration framework is designed to support HUB24’s objectives. To achieve our purpose of “Empowering
better financial futures, together” HUB24 needs exceptional people to deliver customer value and growth in
an innovative and collaborative manner. We have outlined below our remuneration principles which guide our
remuneration framework and enable us to attract and retain the best people.
OUR REMUNERATION PRINCIPLES
Remuneration Principles
Provide
competitive and
reasonable rewards
to attract, motivate
and retain high
calibre individuals to
drive the success of
HUB24
Ensure our
people are
rewarded via
market competitive
remuneration
structures and
practices
Our incentive
schemes are
designed to reward
achievement of
targets aligned to
HUB24’s strategy
Ensure key
people are aligned
to shareholder
interest via
appropriate
long-term equity
incentives
Align incentives
to cultural and
compliance
outcomes, subject
to deductions for
significant non-
compliance
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 29
EXECUTIVE KMP REMUNERATION FRAMEWORK
HUB24’s Executive KMP Remuneration Framework is made up of three components that when combined create the
total remuneration opportunity for Executive KMP and senior leadership team members.
Fixed Remuneration (FR)
Short Term Incentive (STI)
Long Term Incentive (LTI)
FR consists of Base Salary,
Superannuation and Benefits.
FR is set to attract and retain
Executive KMP with the right
capability and experience.
FR is reviewed annually, and the
process consists of a review of
company-wide, functional portfolio
and individual performance,
relevant comparative
remuneration in the market,
and where appropriate, external
advice on practices and market
comparisons.
STI is paid in three equal
instalments, with one third paid
at the end of the performance
year, one third after 6 months
and the remaining third, 12
months after the end of the
performance period.
STI rewards Executive KMP based
on structured qualitative and
quantitative scorecard measures
being achieved as determined
by the Board. The scorecard
measures include ‘target’ and
‘stretch’ Key Performance
Indicators (KPIs).
Executive KMP are kept
accountable through deferral
periods that act as malus and
clawback mechanisms intended to
protect shareholder interests.
LTI is delivered in a mixture of
Options and/or Performance
Award Rights (PARS) that are
performance-tested over a
3 or 5-year period.
LTI rewards Executive KMP
for long-term performance,
encourages shareholding and
delivers long-term value creation
for shareholders based on:
• Compound Annual Growth
Rate (CAGR) in FUA; and
• Absolute Total Shareholder
Return (ATSR) performance.
Special awards of PARS under
different terms & conditions may
be granted to Executives in limited
circumstances to recognise their
additional contribution in the
growth of HUB24.
FR
STI
LTI
Base salary,
superannuation and
other benefits
33%
Assessed over a
1-year performance
period against
a mixture of
financial, strategic
and individual
performance metrics
33%
33%
STI is paid in 3 equal instalments, with one
third paid at the end of the performance
year, one third after 6 months and the
remaining third 12 months after the end
of the reporting period. 50% of the total
STI can be delivered in Shares
Delivered in Options and/or Performance Award Rights (PARS)
and assessed against:
• Funds Under Administration Compound Annual Growth Rate
(50% weighting)
• Absolute Total Shareholder Return (50% weighting)
12 month disposal
restriction applies to
any Shares acquired
from the exercise of
vested Options and
vested PARS
FY21
FY22
FY23
FY24
FY25
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 30
FY21 EXECUTIVE KMP REMUNERATION MIX
The weighting of each remuneration component of an executive’s total remuneration opportunity is aligned to
the executive remuneration framework outlined in section 5. The following diagrams set out the weighting of each
remuneration component for the Managing Director and other Executive KMP based on their maximum potential STI
and LTI opportunities and does not represent actual remuneration received for FY21.
Managing Director Pay Mix at
Maximum for FY21
Other Executive KMP Pay Mix at
Maximum for FY21 (average)
FR
36.36%
LTI
36.36%
STI
27.28%
3. BUSINESS PERFORMANCE IN FY21
FR
48.07%
LTI
26.44%
STI
25.49%
£
$58.6b
Total
FUA
£
$8.9b
Net
Flows
£
$36.2m
Underlying
EBITDA
£
$15.0m
Underlying
NPAT
£
208%
Total Shareholder
Return
The graph below shows HUB24’s Underlying EBITDA outcomes over the last five years compared to the Managing
Director’s STI outcomes over the same period. The graph shows that STI outcomes have been fair in comparison to
Company performance against one of our key financial metrics.
Underlying EBITDA v Managing Director’s STI outcome
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 31
The table below details HUB24’s performance against key financial and operational metrics for the five-year period
ended 30 June 2021.
PARS FUA ($b)
Platform FUA ($b)
Revenue ($m)
Underlying EBITDA ($m)
Underlying Profit/(Loss) after income tax ($m)
Earnings per Share (statutory basic) ($)
Dividends per share (cents per share $)
Total dividends paid and payable ($m)
Share price at financial year end ($)
TSR in the financial year1
FY21
17.2
41.4
110.9
36.2
15.0
14.83
0.10
6.8
28.51
208%
FY20
0.2
17.2
82.5
24.7
9.8
13.13
0.07
4.4
9.30
-21%
FY19
-
13.1
98.7
15.4
6.5
11.54
0.046
2.9
11.88
3%
FY18
-
8.3
87.0
11.4
5.4
12.27
0.035
2.2
11.55
86%
FY17
-
5.5
63.8
5.1
3.9
34.95
Nil
Nil
6.24
70%
1 TSR is calculated using the closing and opening share price and dividends for the financial year.
4. EXECUTIVE KMP REMUNERATION OUTCOMES
As reported in section 3, HUB24 had a standout year, delivering strong results against all Executive KPIs for FY21.
Reflecting our performance and the shareholder value that has been generated over the longer-term, we expect the LTI
issued in FY18 to vest at 100% once tested on 18 October 2021 using the 40 day VWAP following our financial reporting.
FIXED REMUNERATION
To ensure Fixed Remuneration continues to support the achievement of our strategy and future needs of the
business, the Board sought advice from external advisers and benchmarked Executive KMP remuneration against
a primary comparator group of 15 companies with similar scale, complexity, revenue and market capitalisation. A
secondary comparator group of wealth management and platform businesses within larger institutions was also
considered to ensure a rigorous review of market conditions. An agreed freeze to Executive KMP fixed remuneration
expired in FY21, and this quality market data ensured that we were able to correct shortfalls against current market
conditions to continue to attract and retain the highest calibre of Executive KMP.
During FY21 the Board made Fixed Remuneration adjustments to Executive KMP of between 9–15% to align their
total remuneration position to the market following an agreed two year freeze period. These increases also reflect
the significant growth in HUB24’s size and scale, its entrance into the ASX200 and the resulting increase in the
responsibilities of Executive KMP. These adjustments ensure that the executive remuneration framework continues
to support the achievement of our strategy and the future needs of our business by retaining our key talent. These
adjustments to fixed remuneration were effective from 1 December 2020, rather than the usual date of 1 September
2020, as a cost management response to the then unclear impact of COVID-19 on local economic conditions.
Name
A. Alcock – Managing Director
J. Entwistle – Director, Strategic Development
C. Lawrenson – Chief Operating Officer
Fixed Remuneration (including
superannuation) frozen 2018 to 2020
Fixed Remuneration (including
superannuation) effective 1 Dec 2020
$451,805
$370,000
$369,570
$520,000
$425,000
$402,000
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 32
STI OUTCOMES – LINK TO PERFORMANCE
The Managing Director’s FY21 scorecard capturing corporate and individual goals, their weighting and the performance
level achieved are summarised below. Further detail on the STI structure is provided in section 5.
FY21 STI
Measure
FY21 outcome
Commentary
Financial Performance – 35% weighting
Result – 32.35%
Profitability
Group profitability
• Group underlying EBITDA up $11.5 million (47%) year on year.
• Group underlying NPAT up $8.2 million (84%) year on year.
Platform profitability
• Platform underlying EBTDA up $9.2 million (32%) year on year.
Tech Solutions profitability
• Tech Solutions underlying EBITDA of $1.8 million (up $2.7 million
from FY20).
Operating Cashflow
Platform revenue margin
• Positive operating cashflow outcome of $26.4 million (excluding
strategic transaction costs), largely driven by underlying growth in
platform account numbers and balances.
• Platform revenue margin impacted by shift in mix of client
portfolios from Xplore acquisition, lower RBA cash rates
throughout FY21 and lower trading activity because of reduced
market volatility.
Strategy & Growth – 35% weighting
Result – 35%
Platform net inflows
• Record platform annual net flows of $8.9bn (including $1.4bn
Private Client PARS
Mergers & Acquisitions
Current year growth
initiatives
bulk transition) up 80% on FY20.
• Acquisition of Xplore Wealth and Ord Minnett PARS delivering
capability and scale in non-custody administration services and
facilitated HUB24’s entry to the PARS market.
• PARS FUA $17.2bn at 30 June 2021 across 7,538 accounts.
• Completed two strategic transactions delivering transformational
FUA scale, market leadership in PARS and new capabilities with
accretive synergies to be realised in future periods.
• Divested our licensee services business Paragem Pty Ltd and
completed a strategic investment in Easton Investments, a
diversified financial services business servicing the needs of
financial advisers and accountants.
• Continued investment in sales, technology, operational and
marketing capabilities to accelerate organic growth.
• Launched new Private Label Investment & Superannuation
solutions and completed a bulk transition of $1.4bn FUA into the
private label solution.
•
Increased the number of advisers who use the platforms by 48%
during FY21.
• Established a strategic relationship with IOOF to act as their
platform administration and custody provider and collaborate to
develop a range of solutions and products.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
33
FY21 STI
Measure
FY21 outcome
Commentary
Future growth initiatives
• Refreshed corporate strategy to reflect changing landscape.
• Acquisition of Xplore Wealth and Ord Minnett PARS delivering
capability and scale in non-custody administration services and
facilitated HUB24’s entry to the growing PARS market.
• Entered private client/HNW market through acquisitions
including additional capabilities such as bonds and internationally
domiciled managed funds.
• Entered into a technology partnership & distribution agreement
with Easton Investments as a cornerstone client for HUBconnect’s
data and technology services.
Innovation, Customer Service & Market Leadership – 15% weighting
Result – 13.40%
Customer experience and
market leadership
Product and service
development
Industry innovation and
market leadership
• Customer satisfaction: High satisfaction rate maintained.
• Awards: Financial advisers rated HUB24’s platform first for
Overall satisfaction in the 2021 Platform Service Level Report
recognising HUB24’s customer service excellence and market
leading solutions. HUB24 ranked highly across all categories,
taking out 1st place in 5 of the 9 survey categories.
• Expansion of our product and service offerings including:
– Launch of new Private Label Investment & Superannuation
solutions and completed a bulk transition of $1.4bn FUA into
the solution.
– Launch of a Managed Portfolio Academy to educate advisers
and solidify HUB24’s market leadership position.
• Awards: HUB24 announced as the Best Platform Overall, and
Best Platform Managed Accounts Functionality for the 5th year
running by Investment Trends in the 2020 Platform Competitive
Analysis and Benchmarking Report.
• Data and technology solutions implemented for key licensee
clients to deliver reporting efficiencies and compliance
monitoring solutions.
Operational Capability & Certainty – 15% weighting
Result – 14.25%
Risk & Compliance
• Effective risk culture. Continued to mature HUB24’s risk and
compliance framework, including systems upgrades and risk
culture. Risk focus supported by internal and external auditors.
• Responded effectively to the changing COVID-19 environment
continuing to deliver high quality service to our clients and
establishment of a flexible hybrid working model and delivery of
initiatives to support employee welfare.
• Maintained HUB24 ISO:27001 accreditation.
• Continued to mature HUB24’s Cyber Resilience program,
including modifications to HUB24’s Cyber Risk management
framework in line with evolving market environment.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 34
FY21 STI
Measure
Group Operating
Model evolution
FY21 outcome
Commentary
• Sustainable employee engagement – Overall engagement
score remains Highly Satisfied, with improved scores across all
key FY21 focus areas.
• Continued to build capacity and scale in terms of systems, people
and processes to ensure operational continuity and provide
foundations for future growth including the appointment of a
new Chief Product Officer.
• Repositioned HUBconnect business in line with strategy. HUBconnect
infrastructure now underpinning many Group initiatives.
Total Overall Outcome – 95%
Outcome
Base and stretch targets apply
Base target only
Stretch target only
The STI outcomes for Executive KMP against their maximum opportunities are disclosed below.
Name
A. Alcock – Managing Director
J. Entwistle– Director, Strategic Development
C. Lawrenson – Chief Operating Officer
K. Shanahan – Chief Financial Officer and Joint Company Secretary
STI maximum
opportunity
% of maximum
STI earned
%of maximum STI
forfeited
$390,000
$318,750
$261,300
$170,000
95%
95%
91.5%
92.6%
5%
5%
8.5%
7.4%
LTI OUTCOMES – LINK TO PERFORMANCE
The FY18 LTI is tested over a 3-year period from 1 July 2018 to 30 June 2021, with the ATSR hurdle tested using the 40
day volume weighted average price (VWAP) following the FY21 full year results announcement (being 18 October 2021).
Executive KMP have achieved 50% performance measures as shown in the table below resulting in 100% per cent of
Options and PARS vesting of those which are currently eligible for testing. The remaining 50% of Options and PARS
requires final performance testing on 18 October 2021, but if based on testing at the date of this report, the ATSR
stretch target would have been achieved. The following graphs also show TSR and FUA performance over the FY18 LTI
performance period.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 35
HUB24 v S&P/ASX200 3-year TSR
HUB24 FUA
200%
150%
100%
50%
0%
-50%
3 year TSR: 140%
CAGR: 34% p.a.
3 year TSR: 32%
CAGR: 10% p.a.
Jul 2018
Jul 2019
Jul 2020
Jul 2021
HUB24
S&P/ASX200
*TSR data sourced from Thomson Reuters’ Eikon Refinitiv platform
Measure Weighting
Vesting criteria
ATSR
50%
The CAGR in the ATSR over the three-year period until 18 October 2021 is assessed as follows:
• Threshold: 12.5% ATSR CAGR – 25% vesting; and
• Stretch: 17.5% ATSR CAGR – 100% vesting.
Straight-line vesting will occur between threshold and stretch.
Result
(% vested)
To be tested
18 October
2021
CAGR FUA 50%
The CAGR in FUA over the three-year period until 30 June 2021 is assessed as follows:
100%
• No vesting below 29.23% CAGR in FUA p.a. which is 115.8% over three years;
• 50% vesting once CAGR in FUA reaches 33.85% p.a. which is 139.8% over three years
representing approximately $20 billion; and
• 100% vesting once CAGR in FUA reaches 40.23% p.a. which is 175.7% over three
years representing approximately $23 billion or more.
Straight-line vesting will occur between 29.23% and 33.85% CAGR (for 0 to 50% vesting)
and between 33.85% and 40.23% CAGR in FUA (for 50 to 100% vesting).
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 36
5. EXECUTIVE KMP REMUNERATION STRUCTURE
STI
The objective of the STI is to reward Executive KMP in a manner that focusses them on achieving short-term business goals
tailored to functional leadership deliverables and which contribute to the strategy and creation of shareholder value.
Below we have set out the key terms of the STI for FY21:
Element
Opportunity
Delivery
Description
Managing Director: 75% of Fixed Remuneration at maximum.
Other Executive KMP: 40–75% of Fixed Remuneration at maximum.
STI is paid in three equal instalments, with one third paid at the end of the performance year, one third
after 6 months and the remaining third 12 months after the end of the performance period.
These deferral periods are intended to enhance malus and clawback mechanisms and mitigate risk.
STI is offered in cash. However, at the election of Executive KMP, 50% of the total STI earned can be
delivered in Shares.
Performance period
1 year (i.e. 1 July to 30 June).
Performance measures HUB24’s STI strategy aims to focus Executive KMP on a balance of financial, operational and strategic
targets. This ensures Executive KMP are rewarded for achieving objectives that are fundamental to the
success of HUB24. The weightings for each category in the Managing Director’s FY21 scorecard are
outlined below.
Financial Performance – 35% weighting
Strategy & Growth – 35% weighting
Innovation & Market Leadership – 15% weighting
Operational Capability & Certainty – 15% weighting
• The financial measures were chosen as they represent key drivers of HUB24’s financial performance
(EBITDA, Operating Cashflow and revenue margin aimed at protecting revenue margins and
profitability from the impact of price cutting), while also providing a framework for delivering
shareholder returns.
• Growth and strategic measures were chosen as they represent HUB24’s go-forward strategy and
assess progress against new initiatives that ensure HUB24’s longevity and success. This may involve
(not intended to be exhaustive) assessments against any mergers and acquisitions which occur,
customer acquisitions and developments of new markets.
•
Innovation and Market Leadership measures represent key metrics related to HUB24’s interactions
with customers (service and experience), rollout of new products and new product offerings and the
progress of strategic innovation.
• Operational Capability & Certainty measures focus on critical objectives related to improvements
to our risk framework, our regulatory compliance and our progress in building HUB24’s sustainable
scalability and growth.
The Board determines the relative weighting and mix of performance measures for Executive KMP in
order to deliver long-term sustainable shareholder value.
LTI
The objective of the LTI Plan is to reward Executive KMP for delivering sustained growth in shareholder value and to
provide HUB24 with the ability to attract, motivate and retain appropriate senior leaders.
Below we have set out the key terms of the LTI issued in FY21:
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 37
Element
Opportunity
Description
Managing Director: 100% of Fixed Remuneration.
Other Executive KMP: 40–100% of Fixed Remuneration.
Delivery
Options (40%) and PARS (60%).
Performance period
3 years. A further 12-month disposal restriction applies to Shares issued upon the exercise of vested
Options and vested PARS.
Exercise price
The exercise price of the Options will be equal to the twenty-day volume weighted average price
(VWAP) of HUB24’s shares traded on the ASX prior to the release of full-year results.
No exercise price will be payable in respect of the exercise of vested Performance Rights.
Expiry period
Options: 5 years from the date of issue.
PARS: 15 years from the date of issue.
Performance measures ATSR performance measure – 50% weighting
ATSR is measured as the growth in share price over the performance period and any dividends
declared. ATSR has been selected as an appropriate measure for HUB24 given: its status as a growth
company (therefore relative comparisons are not as relevant); there are insufficient listed companies in
the Australian market comparable to HUB24; a broader index is not considered appropriate given this
could be misaligned to the creation of shareholder value; and achieving challenging ATSR outcomes
over the long-term should align vesting with superior shareholder returns.
The calculation methodology for ATSR is:
• Opening share price used: 20 trading day VWAP immediately prior to the release of full year results.
• Closing share price used: 40 trading day VWAP immediately following the release of full year results.
Target
Threshold: 11.5% p.a.
11.5–16.5% p.a.
Maximum: 16.5% p.a.
Vesting
25%
Straight line vesting between 25% and 100%
100%
Where ATSR targets are not met after the 3-year performance period, any portion of unvested awards
will be subject to a higher test in the 4th year. These awards will only vest in the 4th year where
cumulative ATSR CAGR targets over 4 years are achieved (i.e. the ATSR returns must be above threshold
compounded over 4 years). This retesting provision allows for the possibility that market dynamics
and factors outside of management’s control may result in HUB24’s share price at the end of the
performance period not reflecting actual business success. The application of the retest provision is at
the sole discretion of the Board. The Board considers that the requirement to achieve the higher test in
year 4 for vesting is aligned to shareholder value over the long-term and mitigates risks arising from a
cliff vesting at 3 years.
CAGR FUA – 50% weighting
CAGR FUA is measured as the total amount of funds under which HUB24 provides administrative
services and charges a fee for managing. This includes growth in Platform FUA, Portfolio Administration
and Reporting Services (PARS) FUA and net flows driving HUB24’s overall profitability. CAGR FUA has
been selected for HUB24 as it is a key financial metric used in the wealth management industry and
measures HUB24’s market share.
Target
Threshold: 26.8% p.a. representing an increase
of 103.9% over three years of approximately $35
billion in CAGR FUA.
26.8-35.7% p.a. representing an increase of
approximately $35 billion to $43 billion in
CAGR FUA.
Vesting
50%
Straight line vesting between 50% and 100%
Maximum: 35.7% p.a. representing an increase
of 150% over three years of approximately $43
billion in CAGR FUA.
100%
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 38
SPECIAL PARS GRANT
At the FY20 AGM, shareholder approval was received for the grant of a special award to the Managing Director, separate
to the annual LTI plan. Similar awards were made to other key executives. These awards were granted to recognise the
importance of the Managing Director and key executives in the ongoing success of HUB24’s business over the long-term
and to retain them through a period of significant change in the industry. To act as a further retention mechanism, the
Special PARS grants were made in exchange for longer notice periods for each key executive, now set at 12 months. All
FY21 awards are subject to a significant FUA CAGR hurdle and run over a 5 year performance period.
No further special grants will be made in FY22. The below table provides details of the one-off FY21 award to the
Managing Director as approved by shareholders.
Element
Description
Opportunity
270,000 Performance Rights
Performance period
5 years – 1 July 2020 to 30 June 2025.
Vesting criteria
220,000 Performance Rights are measured against growth of CAGR in FUA as follows:
Target
Vesting
Zero vesting below 23.8% p.a. CAGR in FUA
Threshold: 23.8% p.a. representing an increase of
191% over five years of approximately $50 billion
in CAGR FUA.
50%
23.8–28.4% p.a. representing approximately
$50 billion to $60 billion in CAGR FUA.
Straight line vesting between 50% and 100%
Maximum: 28.4% p.a. representing an increase of
249% over five years of approximately $60 billion
in CAGR FUA.
100%
50,000 Performance Rights are measured against growth of CAGR in FUA as follows:
Target
Below 32.4% p.a. of CAGR in FUA.
Target: 32.4% p.a. representing an in-crease of
307% over five years of approximately $70 billion
in CAGR FUA.
Vesting
Zero
100%
Board assessment
In assessing CAGR in FUA against all vesting criteria, the following will be considered:
• To vary on a good faith basis the percentage of PARS which may vest as well as the FUA dollar
thresholds which must be satisfied to account for;
– acquisitions of businesses, assets, companies or other entities which may be undertaken by
HUB24 during the performance period; and
–
increases in PARS (or other agreed profit contributing organic business lines) on a forecast or
actual underlying business proportionality basis; and
• To reduce by up to 50%, the number of PARS that vest if FUA growth was achieved on commercial
terms materially less favourable to HUB24 than terms generally offered in the normal course of
business unless such commercial terms were approved by the Board. The Board will exercise
such discretion in a manner consistent with protecting HUB24’s long-term interests, sound risk
management and aligned with the creation of long-term shareholder value.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 39
GENERAL TERMS APPLYING TO VARIABLE AWARDS
The occurrence of particular events may affect the grant and vesting of the STI and LTI. The table below outlines how
these awards may be treated, noting that the Board retains absolute discretion with respect to the incentive plans.
Element
STI
LTI
Treatment on cessation
of employment
Change of Control
The Board has discretion to determine how to
treat an executive’s STI in the case of cessation
of employment, taking into account the
circumstances of the executive’s departure. This
applies to in-year STI as well as deferred STI.
The Board has discretion to determine how STI
will be treated in the event of a change of control
(CIC) event, depending on the circumstances of
the transaction.
Unless the Board exercises its discretion, unvested
and vested Options and PARS will remain on-foot
to be tested in the ordinary course.
Upon a change of control (CIC) event, LTI grants
will vest on a pro rata “period of time” basis unless
the Board exercises discretion to allow the grant to
vest in in full, dependent upon circumstances. The
FY21 Special PARS grants are also subject to this
change of control clause.
Clawback and Malus
The Board has the discretion to reduce, cancel or recover any and all awards in ‘for cause’
circumstances including serious misconduct.
Board discretion
Awards under the STI and LTI are subject to Board discretion at all times.
6. KMP SERVICE AGREEMENTS
Remuneration and other terms of employment for Executive KMP are formalised in employment agreements.
All Executive KMP have ongoing employment agreements. HUB24 may terminate the employment agreement by
providing 12 months written notice or providing payment in lieu of the notice period (based on the fixed component of
the relevant KMP’s remuneration).
The major provisions of the Executive KMP agreements relating to remuneration are set out below. Salaries set out
below are for FY21 and are subject to review by the Remuneration and Nomination Committee.
Fixed
Remuneration
(including
superannuation)
Notice period –
either party
Contractual
Termination
payments
Name
A. Alcock – Managing Director
J. Entwistle – Director, Strategic Development
C. Lawrenson – Chief Operating Officer
K. Shanahan – Chief Financial Officer and Joint Company Secretary
$520,000
$425,000
$402,000
$425,000
12 months
12 months
12 months
12 months
D. Last – Interim Chief Financial Officer
Not applicable
Not applicable
KMP have no entitlement to termination payments in the event of termination for misconduct.
Nil
Nil
Nil
Nil
Nil
7. NED REMUNERATION
On appointment to the Board, all Non-Executive Directors enter into a service agreement with HUB24 in the form of a
letter of appointment. The letter summarises the Board’s policies and terms, including compensation relevant to the
office of Director.
REMUNERATION POLICY AND ARRANGEMENTS
The objective of HUB24’s policy regarding NED fees is below:
• to set aggregate remuneration at a level which provides HUB24 with the ability to attract, motivate and retain NEDs
of the highest calibre whilst incurring a cost which is acceptable to shareholders; and
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 40
• the Remuneration and Nomination Committee may from time to time receive advice from independent
remuneration consultants or utilise market base comparative data to ensure NED fees and payments are
appropriate and in line with the market.
NED fees are limited to a maximum aggregate amount approved by shareholders. An increase was approved at the
2021 AGM, resulting in the current limit of $900,000 per financial year.
HUB24 also requires Directors to be shareholders in the Company. Under our policy, NEDs must hold either directly or
indirectly at least 1,000 HUB24 shares as soon as practical and permissible following their appointment or election.
NEDs receive fees for both Board and Committee membership. The payment of additional fees for serving on a
Committee recognises the additional time commitment required by NEDs who serve on a Committee. HUB24’s current
policy for NED fees are as per the table below and are inclusive of superannuation.
The Chair’s fee is inclusive of all additional participation on HUB24’s Committees – no additional fee is received.
Board and Committee fees (per annum)
Chair
Board member (all other NEDs)
Board member fee (Anthony McDonald only)
Chair of the Audit, Risk and Compliance Committee
Chair of the Remuneration and Nomination Committee
Membership of a Committee
Fees
$220,000
$85,000
$75,000
$20,000
$20,000
$10,000
As a result of COVID-19, the Board determined to freeze NED fees at the October 2019 level until October 2021.
During FY22 the Board intends to undertake an independent benchmarking review of market rates for NED fees taking
into account the increased scale and complexity of HUB24 so as to ensure we remain competitive in attracting and
retaining the right skills and experience.
ADDITIONAL FEES AND RETIREMENT ALLOWANCES
No additional amounts are paid to each NED other than reimbursements for reasonable travel, accommodation and
other expenses incurred as a consequence of their attendance at Board meetings and otherwise in the execution of their
duties as Directors. There are no retirement schemes or retirement benefits other than statutory benefits for NEDs.
GRANT OF PARS TO THE CHAIR OF THE REMUNERATION AND NOMINATION COMMITTEE
At the FY18 AGM, shareholder approval was received for the grant of PARS to the Remuneration and Nomination
Committee Chair, Anthony McDonald. The PARS were granted to recognise the additional efforts of Mr McDonald to
support the growth of HUB24. When granted, HUB24 was a smaller company experiencing rapid growth and required
a flexible approach to NED remuneration. These PARS were performance tested over three years between 1 July 2018
to 30 June 2021 and were subject to Mr McDonald supporting HUB24’s executive team in maintaining key accounts
and his role in facilitating growth and customer satisfaction amongst key accounts. In lieu of granting these PARS, Mr
McDonald agreed to a fee freeze between October 2017 to October 2020, and he received a lower Board member fee
than other NEDs.
The Board has determined that Mr McDonald has met the performance requirements to vest this special PARS grant
which has been verified by a qualified Independent Accountant.
Going forward, HUB24 does not anticipate these types of awards will be necessary for NEDs given our increased scale
and state of maturity.
NED STATUTORY REMUNERATION
The remuneration of NEDs for the year ended 30 June 2021 and 30 June 2020 is detailed below.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 41
Short-term benefits
Cash
Salary
and fees
$
Non-
monetary
benefits
$
Bonus
$
Post
Employment
Benefits
Super-
annuation1
$
End of
service
Long
Service
Leave
$
107,033
210,672
56,489
87,000
82,192
101,588
86,758
35,388
23,028
98,254
355,500
532,902
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
106,357
-
42,696
-
30,270
-
8,242
3,362
36,334
-
224,079
3,362
-
-
-
-
-
-
-
-
-
-
-
-
Share-based
payments
Total
remuneration
Shares
$
Options &
PARS
$
-
-
-
-
-
-
-
-
-
-
-
-
-
89,857
94,639
-
-
-
-
-
-
89,587
94,639
Total
$
213,390
210,672
188,772
181,639
112,462
101,588
95,000
38,750
59,362
98,254
669,166
630,903
AUD
NEDS
B. Higgins
FY21
FY20
A .McDonald
FY21
P. Rogan
R. Stringer2
I. Litster3
Total
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
1 During FY21, the Company revised its assessment of the obligation to pay Superannuation Guarantee Charges (SGC) to NEDs. Following the review,
SGC for the period from 2013 to 2020 was paid in the current year. Additionally, all relevant NEDs received a reduction in their current year fee. The
cumulative NED fees and SGC to date represents the fees agreed.
2 Appointed 1 February 2020.
3 Resigned 5 March 2021.
NED SHAREHOLDINGS
The number of shares in HUB24 held during the financial year by each NED, including their personally related parties,
is set out below.
Ordinary Shares
B. Higgins
A. McDonald
P. Rogan
R. Stringer
I. Litster1
Balance at the
start of the year
Other changes
during the year
Balance at the
end of the year
806,811
17,374
35,000
2,550
3,280,677
1,500
1,500
5,000
520
(800,000)
808,311
18,874
40,000
3,070
2,480,677
1
Ian Litster ceased as a Director on 5 March 2021.
8. REMUNERATION GOVERNANCE
HUB24’s remuneration governance structure provides oversight over HUB24’s remuneration practices and policies.
Activities of the Remuneration and Nomination Committee are governed by its Charter, which is available on HUB24’s
website at www.HUB24.com.
The following diagram illustrates HUB24’s remuneration governance framework. The Board has the ultimate
responsibility for the oversight of the executive remuneration framework including variable pay outcomes, policies
and processes, informed by the Remuneration & Nomination Committee’s recommendations.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 42
External advisors
External advisors may be engaged
directly by the Remuneration and
Nomination Committee to provide
advice or information relating
to KMP that is free from the
influence of management.
During FY21, the Committee
sought advice from KPMG and
Aon Hewitt.
This did not involve providing any
remuneration recommendations as
defined by the Corporations Act 2001.
HUB24 Board
The Remuneration and Nomination Committee
The Remuneration and Nomination Committee is delegated responsibility by the
Board for reviewing and making recommendations on remuneration policies for
HUB24, including policies governing the remuneration of executives and NEDs.
The Remuneration and Nomination Committee assists the Board in its oversight of:
• remuneration policy for Executive KMP;
•
• HUB24’s compliance with applicable legal and regulatory requirements in
the remuneration framework for Executive KMP, including STI and LTI plans;
respect of remuneration matters; and
• approval of the allocation of shares and incentives under HUB24’s schemes.
Management
Management provides relevant information to the Remuneration and
Nomination Committee to assist with its decision-making and advises the
Remuneration and Nomination Committee of statutory requirements.
Management may also seek advice from external advisors as required.
The Managing Director is responsible for reviewing the performance of
HUB24’s Executive KMP and the Remuneration and Nomination Committee
reviews the Managing Director’s performance.
SECURITIES DEALING POLICY
All staff are required to comply with HUB24’s Securities Dealing Policy (Group Securities Trading Policy) at all times
and in respect of all HUB24 shares held. Trading is subject to pre-clearance and is not permitted during designated
blackout periods unless there are exceptional circumstances.
LOANS AND TRANSACTIONS
HUB24 has not provided any loans or entered into transactions with any KMP and/or related parties in FY21.
9. OTHER STATUTORY DISCLOSURES
Statutory remuneration disclosures are prepared in accordance with Australian Accounting Standards and include share-
based payments expensed during the financial year, calculated in accordance with AASB 2 Share-based Payments.
EXECUTIVE KMP REMUNERATION
The following table includes statutory remuneration disclosures for FY21 and FY20.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 43
Cash
Salary
and fees1
$
Short-term benefits
Non-
monetary
benefits
$
Bonus
$
Post
Employment
Benefits
Super-
annuation1
$
End of
service
Long
Service
Leave
$
Share-based
payments
Total
remuneration
Shares
$
Options
& PARS
$
Performance
related
%
Total
$
506,116
370,481
4,955
21,694 10,077 25,862
886,619
1,825,804
-
-
-
-
-
-
-
-
-
21,003
9,303
-
728,966
1,467,941
21,694
8,118
1,000
759,396
1,473,977
21,003
7,536
1,000
664,076
1,259,517
21,694
-
1,000
280,165
21,003
8,290
1,000
263,800
17,773
-
-
-
-
-
-
-
-
39,264
-
-
-
-
-
-
904,069
853,039
624,466
-
284,477
158,400
20%
19%
21%
18%
26%
25%
25%
-
-
-
-
-
AUD
Executive KMP
A. Alcock
J. Entwistle
FY21
FY20
FY21
FY20
438,669
270,000
380,956
302,813
342,901
223,000
C. Lawrenson FY21
363,427
237,783
FY20
350,946
208,000
K. Shanahan
FY21
360,009 207,4202
D. Last
FY20
FY21
FY20
-
284,477
158,400
-
-
-
Total
FY21 1,894,985 1,118,497
4,955
82,855 18,195 27,862 1,965,444
5,112,793
FY20 1,549,946
701,000
-
78,034 25,129
3,000 1,743,869
4,100,979
1
Includes movements in annual leave balances.
2 K.Shanahan received $50,000 signing bonus during FY21.
KMPS’ INTERESTS IN OPTIONS AND PARS
We have detailed beneficial interests in Options and PARS granted as at 30 June 2021 in the table below. We discuss
the service and performance criteria for the equity awards vesting in FY21 in section 4.
Type
Balance at
1 July 2020
Granted
Exercised
Lapsed/
Forfeited
Other trans-
actions
Balance at
30 June 2021
Name
NEDs
A. McDonald
PARS
20,000
Nil
Nil
Executive KMP
A. Alcock
Options
PARS
J. Entwistle
Options
PARS
C. Lawrenson Options
PARS
K. Shanahan
Options
D. Last
Total
PARS
Options
PARS
Options
PARS
440,491
184,752
356,117
167,118
86,454
62,981
Nil
Nil
Nil
Nil
883,062
434,851
33,558
301,395
27,435
295,653
10,380
74,706
10,974
75,261
Nil
Nil
82,347
747,015
150,000
Nil
120,000
28,857
57,664
18,378
Nil
Nil
Nil
Nil
327,664
47,235
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
20,000
324,049
486,147
263,552
433,914
39,170
119,309
10,974
75,261
Nil
Nil
637,745
1,134,631
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 44
KMP OPTIONS
KMP hold the following Options:
Financial year
of grant
Financial
year in which
Options
may vest
Number of
Options
granted
Value of
Options at
grant
$
Number of
Options vested
during the
year
Number of
Options
lapsed/
forfeited
during the
year
2021
2020
2019
2018
2017
2016
2021
2020
2019
2018
2017
2016
2021
2020
2019
2018
2016
2021
Nil
2024
2023
2022
2021
2020
2019
2024
2023
2022
2021
2020
2019
2024
2023
2022
2021
2019
2024
Nil
33,558
54,764
51,186
78,077
106,464
150,000
27,435
44,848
40,000
63,940
87,329
120,000
10,380
13,438
15,352
23,417
34,247
10,974
Nil
371,990
208,083
215,994
317,133
198,449
240,000
304,117
170,406
142,880
191,580
203,477
114,000
115,062
51,059
54,808
70,163
119,126
121,647
Nil
Nil
Nil
Nil
78,077
Nil
Nil
Nil
Nil
Nil
63,940
Nil
Nil
Nil
Nil
Nil
23,417
34,247
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Name
Executive KMP
A. Alcock
J. Entwistle
C.Lawrenson
K.Shanahan
D.Last
The assessed fair value at grant date of the Options granted to individuals is allocated over the period from grant date
to expected vesting date and the amount is included in the remuneration tables in this section of this Remuneration
Report. Fair values at grant date are independently determined using the Black Scholes and the Hoadleys 1 Hybrid ESO
model that takes into account the exercise price, term of the Option, share price at grant date, expected price volatility
of the underlying share price and the risk free rate for the term of the Option.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 45
KMP PARS
KMP hold the following PARS:
Name
NEDS
A. McDonald
Executive KMP
A. Alcock
J. Entwistle
C. Lawrenson
K. Shanahan
D. Last
Financial
year of grant
Financial year
in which PARS
may vest
Number of
PARS granted
Value of PARS
at grant
$
Number of PARS
vested during
the year
Number of PARS
lapsed/forfeited
during the year
2019
2021
2020
2019
2019
2018
2017
2021
2020
2019
2019
2018
2017
2021
2020
2019
2019
2018
2018
2021
2021
2021
20,000
255,115
2024
2023
2023
2022
2021
2020
2024
2023
2023
2022
2021
2020
2024
2023
2023
2022
2021
2021
2024
2024
301,395
21,932
90,000
14,072
23,897
34,851
295,653
17,961
90,000
11,000
19,570
28,587
74,706
5,382
35,000
4,221
11,211
7,167
75,261
Nil
6,078,887
206,507
1,142,224
157,034
166,129
113,475
5,978,919
169,117
1,142,224
117,852
107,966
93,079
1,500,831
50,676
444,198
45,219
71,212
39,542
1,510,494
Nil
Nil
Nil
Nil
Nil
Nil
23,897
Nil
Nil
Nil
Nil
Nil
19,570
Nil
Nil
Nil
Nil
Nil
11,211
7,167
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
The assessed fair value at grant date of the PARS granted to individuals is allocated over the period from grant date
to expected vesting date and the amount is included in the remuneration tables in this section of this Remuneration
Report. Fair values at grant date are independently determined using the Black Scholes and the Hoadleys 1 Hybrid ESO
model that takes into account the term of the PAR, share price at grant date, probability of service condition being met,
expected volatility of the underlying share price and risk free rate.
PARS granted carry no dividend or voting rights.
EXECUTIVE KMP SHAREHOLDINGS
The number of shares held in HUB24 during the financial year by each Executive KMP, including their personally
related parties, is set out below.
Ordinary Shares
Balance at the
start of the year
Received due to tax
exempt share plan issue
Other changes
during the year
Balance at the
end of the year
A. Alcock
J. Entwistle
C. Lawrenson
K. Shanahan
D. Last
939,683
1,371,158
323
Nil
Nil
-
58
58
Nil
Nil
121,700
(550,319)
65,940
Nil
Nil
1,061,383
820,897
66,321
Nil
Nil
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 46
AUDITOR’S INDEPENDENCE DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Board of Directors
HUB24 Limited
Level 2, 7 Macquarie Place
Sydney NSW 2000
23 August 2021
Board of Directors
HUB24 Limited
Dear Board Members
Level 2, 7 Macquarie Place
Sydney NSW 2000
Auditor’s Independence Declaration to HUB24 Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of HUB24 Limited.
23 August 2021
As lead audit partner for the audit of the financial report of HUB24 Limited for the year ended 30 June 2021, I
declare that to the best of my knowledge and belief, there have been no contraventions of:
Dear Board Members
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
Auditor’s Independence Declaration to HUB24 Limited
• any applicable code of professional conduct in relation to the audit.
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
Yours faithfully
of independence to the directors of HUB24 Limited.
As lead audit partner for the audit of the financial report of HUB24 Limited for the year ended 30 June 2021, I
declare that to the best of my knowledge and belief, there have been no contraventions of:
DELOITTE TOUCHE TOHMATSU
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• any applicable code of professional conduct in relation to the audit.
Yours faithfully
Stuart Alexander
Partner
Chartered Accountants
DELOITTE TOUCHE TOHMATSU
Stuart Alexander
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
47
FINANCIAL
REPORT
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
48
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Income
Revenue
Fair value gain on contingent consideration
Interest and other income
Share of profit from associates
Expenses
Platform and custody fees
Employee benefits expense
Property and occupancy costs
Depreciation and amortisation expense
Administrative expenses
Impairment write-off
Interest expense on lease liability
Notes
Consolidated
2021
$
20201
$
6
17
6
6
6
9
31
7
24
24
107,956,897
80,714,880
1,567,978
855,679
472,500
850,627
944,510
-
110,853,054
82,510,017
(10,566,847)
(7,689,122)
(57,241,333)
(40,778,103)
(310,613)
(347,841)
(6,957,116)
(5,279,582)
(20,217,953)
(13,793,621)
-
(1,000,000)
(210,955)
(204,408)
(95,504,817)
(69,092,677)
15,348,237
13,417,340
822,536
(589,942)
(6,401,633)
(4,599,101)
9,769,140
8,228,297
9,769,140
8,228,297
Cents
Cents
14.83
14.28
13.13
12.85
14.07
13.77
Profit before income tax from continuing operations
Profit before income tax from discontinued operations
Income tax expense
Profit after income tax for the year
Total comprehensive income for the year
Earnings per share, attributable to ordinary equity holders of HUB24 Limited
Basic earnings per share
Diluted earnings per share
Earnings per share from continuing operations, attributable to ordinary equity holders of HUB24 Limited
Basic earnings per share – continuing operations
Diluted earnings per share – continuing operations
24
24
13.58
13.07
1 Some comparative balances have been restated to move the Licensee segment to discontinued operations.
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Investment in associates
Intangible assets
Loans
Right of use asset
Deferred tax assets (net of deferred tax liability)
Office equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Provisions
Trade and other payables
Borrowings
Lease liabilities
Deferred income
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Deferred income
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Profit reserve
Reserves
Accumulated losses
Total equity
49
Consolidated
2021
$
20201
$
Notes
20
8
26
11
12
9
7
10
14
13
15
9
15
9
16
17
18
32
19
63,461,183
16,632,900
2,570,332
82,664,415
14,518,627
103,975,943
7,550,000
6,093,322
12,761,191
1,455,293
146,354,376
229,018,791
16,117,929
9,095,559
3,125,000
2,204,461
315,800
30,858,749
9,375,000
4,549,697
2,347,868
775,916
41,204
17,089,685
47,948,434
181,070,357
199,214,378
45,341,770
11,507,257
(74,993,048)
181,070,357
33,809,323
10,046,081
1,799,377
45,654,781
-
39,963,264
-
5,436,824
5,101,024
1,661,629
52,162,741
97,817,522
7,811,054
5,369,919
-
1,670,311
88,879
14,940,163
-
4,385,270
1,513,662
587,078
1,567,978
8,053,988
22,994,151
74,823,371
100,146,048
40,847,253
8,823,118
(74,993,048)
74,823,371
1 Some comparative balances have been restated to move the Licensee segment to discontinued operations.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
50
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Consolidated
Opening balance
Balance at 1 July 2020
Total comprehensive income for the year
Transfer to profit reserve
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Dividends provided for or paid
Capital raising costs
Options and rights exercised
Options and rights granted – Employees
Share based payments – Agility
Capital raising
Xplore settlement
Treasury shares
Issued
capital
$
Reserves
$
Profit
reserves
$
Retained
earnings
$
Total
equity
$
Notes
100,146,048
8,823,118
40,847,253
(74,993,048)
74,823,371
100,146,048
8,823,118
40,847,253
(74,993,048)
74,823,371
-
-
-
-
(1,315,440)
-
-
-
-
-
18, 19
3,820,138
(1,603,780)
-
4,515,919
1,568,356
69,999,980
29,753,296
(4,986,000)
-
-
-
-
-
9,769,140
9,769,140
9,769,140
(9,769,140)
-
9,769,140
(5,274,623)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,769,140
(5,274,623)
(1,315,440)
2,216,358
4,515,919
1,568,356
69,999,980
29,753,296
(4,986,000)
-
Issue of treasury shares to employees
19
228,000
(228,000)
Balance at 30 June 2021
199,214,378
11,507,257
45,341,770
(74,993,048)
181,070,357
Consolidated
Opening balance
Balance at 1 July 2019
Opening balance adjustment on adoption of new
accounting standard
Issued
capital
$
Reserves
$
Profit
reserves
$
Retained
earnings
$
Total
equity
$
Notes
98,187,400
5,256,545
13,014,445
(51,534,848)
64,923,542
98,187,400
5,256,545
13,014,445
(51,534,848)
64,923,542
-
-
-
(26,747)
(26,747)
Total equity at the beginning of the financial year
98,187,400
5,256,545
13,014,445
(51,561,595)
64,896,795
Total comprehensive income for the year
Transfer to profit reserves
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Capital raising costs
Options granted – Employees
Issue of treasury shares to employees
Dividends provided for or paid
Options and rights exercised
19
18
-
-
-
(11,867)
-
-
-
-
-
4,294,717
212,000
(212,000)
-
-
(3,826,942)
1,758,515
(516,144)
-
1,958,648
3,566,573
(3,826,942)
-
8,228,297
8,228,297
31,659,750
(31,659,750)
-
31,659,750
(23,431,453)
8,228,297
-
-
-
-
-
-
-
-
-
(11,867)
4,294,717
-
(3,826,942)
1,242,371
1,698,279
Balance at 30 June 20201
100,146,048
8,823,118
40,847,253
(74,993,048)
74,823,371
1 Some comparative balances have been restated to move the Licensee segment to discontinued operations.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 51
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest paid on lease liability
Short term lease payments
Strategic transaction and due diligence costs
Income tax payment
Net cash inflow from operating activities
Cash flows from investing activities
Payments for acquisitions (net of cash acquired)
Payments for office equipment
Payments for intangible assets
Proceeds from disposal of controlled entities, net of cash disposed
Net cash (outflow) from investing activities
Cash flows from financing activities
ORFR loan facility advance settlement proceeds
Payments for capital raising costs
Proceeds from capital raising
Proceeds from issues of shares and other equity securities
Proceeds from borrowing
Payments for treasury share buy-backs
Repayment of lease principal payments
Dividends paid
Net cash inflow (outflow) from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of year
Consolidated
Notes
2021
$
20201
$
129,176,166
116,810,659
(101,034,426)
(91,768,273)
849,977
(210,952)
(187,101)
(7,166,872)
(2,261,754)
633,021
(204,408)
(212,620)
-
-
19,165,038
25,258,379
(47,729,882)
(587,785)
(5,457,817)
(1,332,270)
(475,000)
(498,365)
(6,726,957)
-
(55,107,754)
(7,700,322)
(7,550,000)
(1,315,440)
69,999,980
3,635,503
13,200,000
(5,012,386)
(2,088,458)
(5,274,623)
65,594,576
29,651,860
33,809,323
63,461,183
2,000,000
(15,756)
-
1,242,371
-
-
(1,614,253)
(3,826,943)
(2,214,581)
15,343,476
18,465,847
33,809,323
9
9
20
30
20
18
9
20
1 Some comparative balances have been restated to move the Licensee segment to discontinued operations.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
52
CONTENTS OF THE NOTES
TO THE FINANCIAL STATEMENTS
1
2
3
4
5
6
7
8
9
Corporate information
Summary of significant accounting
policies
Financial risk management
Critical accounting judgements,
estimates & assumptions
Operating segments
Revenue and expenses from
continuing operations
Income tax
Current assets – trade and other
receivables
Right-of-use assets
10 Office equipment
11 Non-current assets – intangible assets
12 Loans
13 Trade and other payables
14 Current provisions
15 Borrowings
16 Non-current provisions
53
53
54
56
56
59
60
63
64
66
67
72
72
73
74
75
17 Other – non-current liabilities
18 Issued capital
19 Reserves
20 Reconciliation of cash flows
21 Commitments and contingencies
22 Share based payments
76
76
78
78
80
80
23 Significant events after the reporting date 92
24 Earnings per share
25 Remuneration of auditors
26 Related party disclosures
27 Parent entity financial information
28 Key management personnel
29 Financial instruments
30 Business combination
31 Discontinued operations
32 Profit reserves
92
93
93
95
96
96
98
100
100
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 53
1. CORPORATE INFORMATION
The Annual Report of HUB24 Limited and its controlled entities (‘the Group or HUB24’) for the year ended 30 June
2021 was authorised for issue in accordance with a resolution of the Board of Directors on 23 August 2021 and covers
the company as an individual entity as well as the Group consisting of the company and its subsidiaries as required by
the Corporations Act 2001.
HUB24 is a public company limited by shares. It was incorporated and is domiciled in Australia. Its shares are publicly
traded on the Australian Securities Exchange (ASX:HUB).
The nature of the operations and principal activities of the Group are described in the Directors’ report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as
appropriate for profit oriented entities. The financial statements have also been prepared under the historical cost
convention, except for, where applicable, the revaluation of certain classes of assets and liabilities.
PARENT ENTITY INFORMATION
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in Note 27.
COMPLIANCE WITH IFRS
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
The Group has adopted all of the new, revised or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. These Accounting
Standards and Interpretations did not have any significant impact on the financial performance or position of the Group.
GOING CONCERN
The financial report has been prepared on a going concern basis.
DIVIDENDS
The Board’s dividend policy targets a payout ratio between 40% and 60% of the Group’s underlying net profit after tax
over the medium term subject to prevailing market conditions and alternate uses of capital.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June
each year. Refer to Note 26 for a listing of all subsidiaries.
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in Australian dollars ($), which is HUB24 Limited’s functional and presentation currency.
COMPARATIVES
Where required by the Accounting Standards and/or for improved presentation purposes, certain comparative figures
have been adjusted to conform to changes in presentation for the current year.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 54
OPERATING SEGMENTS
The Corporations Act and Accounting Standard AASB8 ‘Operating Segments’ define a business segment. An operating
segment is a component of an entity:
• that engages in business activities from which it may earn revenues and incur expenses (including revenues and
expenses relating to transactions with other components of the same entity),
• whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions
about resources to be allocated to the segment and assess its performance, and
•
for which discrete financial information is available. An operating segment may engage in business activities for which
it has yet to earn revenues, for example, start-up operations may be operating segments before earning revenues.
In line with AASB8 requirements the Group’s segment reporting has been updated for the following areas of change in FY21:
• Sale of Paragem Pty Ltd (Paragem) has led to the Licensee segment being discontinued with the transfer of control
of Paragem to Easton occurring on 1 February 2021 and HUB24 reflecting 7 months of revenues and expenses in
the discontinued Licensee segment in FY21.
•
Investment in Easton Investments Ltd (Easton) of 31.5%, is reflected as an Investment in Associate and equity
accounted. The investment in associate is reflected in the Corporate segment.
• Following the acquisition of Xplore and the Ord Minnett Portfolio, Administration and Reporting Services (PARS) the
HUB24 FUA now comprises significant balances in both Platform and PARS FUA. These services are reported under
the Platform segment.
3. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables, borrowings and cash and cash equivalents.
The Group does not trade in derivative instruments. The Group is exposed to the following risks from its use of
financial instruments:
• Credit risk
• Liquidity risk
• Market risk
•
• Foreign exchange risk
• Capital management
Interest rate risk
The Group’s exposure to each of the above risks, their objectives, policies, and processes for measuring and managing
risk, and the management of capital are outlined in various disclosures within this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group,
through training and management standards and procedures, aims to develop a disciplined and constructive control
environment in which all employees and consultants understand their roles and obligations.
The Group Audit, Risk and Compliance Committee (ARCC) oversees how management monitors compliance with the
company’s and the Group’s risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to risks faced. The ARCC is assisted by external professional advisors from time to time.
CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises from the financial assets of the Group, which comprise cash and cash equivalents
and principally, trade and loan receivables.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 55
Exposure at reporting date is addressed at each particular note. The Group does not hold any credit derivatives to
offset its credit exposure.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures
including an assessment of their independent credit worthiness, financial position, past experience and industry reputation.
In addition, credit risk exposures and receivable balances are monitored on an ongoing basis with the objective that
the Group’s exposure to bad debts is not significant. Management has assessed the expected credit losses on trade
receivables and have used a provision matrix to measure the Group’s impairment losses.
The Group also has credit risk in respect of its debtors. In the case of most transactions, revenue is generally earned
over a period of several months due to the complexity and size of the work involved. The Group manages this risk by
entering into contractual agreements with its counterparties, obtaining external legal advice where necessary, at the
start of each transaction.
The Group provides financial guarantees to wholly-owned subsidiaries and has provided a guarantee to ANZ with
regards to the borrowing facilities in operation during the financial year.
LIQUIDITY RISK
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity risk is to ensure, as far as possible, that it will always maintain banking/credit facilities
and typically ensures that it has sufficient cash on demand to meet operational expenses for a period of 90 days,
excluding the potential impact of extreme circumstances that cannot be reasonably predicted.
Group forecasts and actual cash flows are continuously monitored, matching the maturity of assets and liabilities, to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation.
Refer to Note 29: Financial Instruments for a market risk analysis of the Group’s financial assets and liabilities.
MARKET RISK
Market risk is the risk that changes in market prices will affect the Group’s income and include price risk.
Refer to Note 29: Financial Instruments for a market risk analysis of the Group’s financial assets and liabilities.
CAPITAL MANAGEMENT
The Board’s policy is to maintain a sufficient capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. It is noted that the Group, through its licensed subsidiaries, fully complied with the
minimum regulatory capital requirements for IDPS Operators and providers of custodial services for the year ended 30 June
2021 so as to ensure ongoing capital adequacy. Refer to notes 12 and 29 for information on the Group’s ORFR requirements.
As part of broader capital management plans, during the year the Group issued share capital of $70 million and
secured a $12.5 million amortising bank loan facility, in addition to the established $5 million overdraft facility (refer to
notes 15, 18 and 29).
The ANZ bank loan facility was secured specifically for the strategic transactions. The loan was fully drawn down on 18 February
2021 with principal repayments of $3.125 million payable every calendar year in February and the amount outstanding at
termination date (23 November 2023) payable. The bank loan facility may not be redrawn once it has been repaid.
During FY21 the Group purchased $5 million additional treasury shares to service the Group’s Employee Share Plans
(refer to note 18).
There were no other changes in the Group’s approach to capital management during the year.
INTEREST RATE RISK
Interest rate risk is the risk that the cash rate set by the Reserve Bank of Australia (RBA) changes and will affect the
Group’s income and includes price risk.
Refer to Note 29 Financial Instruments for an interest rate risk analysis of the Group’s financial assets and liabilities.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 56
FOREIGN EXCHANGE RISK
Foreign currency exchange rate risk is the risk that the fair value or future cash flow of an exposure will fluctuate
because of a change in foreign currency rates. The Group’s exposure to the risk of a change in foreign currency relate
primarily to the Group’s operating activities (when revenue and expenses are denominated in a foreign currency).
4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management regularly evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be reasonable under the circumstances. The
resulting accounting judgements and estimates will seldom equal the related actual results.
The COVID-19 outbreak was declared a pandemic by the World Health Organisation in March 2020. The outbreak
and response of governments in dealing with the pandemic has impacted the community and economy. The scale
and duration of these developments remain uncertain as at the date of this report. It is not possible to estimate the
ongoing impact of the pandemic or governments’ responses on the effectiveness of internal controls, accounting
estimates or forecasts. Whilst the methodology for estimates has not changed, the underlying inputs are less certain.
Market volatility may impact Funds Under Administration (FUA) and trading based fees, and any movement in official cash rate
may impact cash margin income. Net flows have proved to be resilient, our new business pipeline remains strong and assisted
FUA transitions are continuing. HUB24’s priority has been, and remains, ensuring the health and safety of the team whilst
continuing to operate our business to meet the needs of licensees, advisers and their clients as well as other key stakeholders.
Our estimates and assumptions have been prepared based upon conditions existing at the date of this report.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities are as follows:
Investment platform estimate of useful life (Note 11)
• Deferred tax assets (Note 7)
•
• Goodwill and other indefinite life intangible assets (Note 11)
• Agility contingent consideration (Notes 13 and 17)
• Restructuring provision (Note 14)
• Useful life assessment for CGUs (Note 11)
• Value in Use assessment of CGUs (Note 11)
• Third Party Claims provision (Note 14)
• Share based payment (Note 22)
5. OPERATING SEGMENTS
IDENTIFICATION OF REPORTABLE SEGMENTS
The Platform, Tech Solutions and Corporate operating segments are based on the internal reports that are reviewed
and used by the executive management team (identified as the Chief Operating Decision Makers hereafter CODM) in
assessing performance and in determining the allocation of resources.
The CODM reviews segment revenues and profits (Underlying EBITDA) on a monthly basis.
KEY ACCOUNTING POLICIES
The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.
During the financial year ended 30 June 2021 the Group has effected a change to the structure of reportable
segments. The Platform segment is inclusive of the purchases of both Xplore and PARS. The Licensee segment has
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 57
been discontinued as the Paragem business was sold effective 1 February 2021. FY21 financials are reflected for the
period up to 31 January 2021. The IT Services segment was renamed as Tech Solutions and now includes both Agility
and HUBconnect fee paying services. HUBconnect development that supports the Platform functionality offering and
which does not derive a separate fee remains in the Platform segment.
The changes to operating segments in FY21 do not have a material impact on the prior period financial information
and therefore prior periods have not been restated.
All of the Group’s operations are based in Australia. The principal products and services for each of the operating
segments are as follows:
PLATFORM
Development and provision of investment and superannuation platform services to financial advisers, stockbrokers,
accountants and their clients. This segment includes both custody and non-custody products and from the financial
year ended 30 June 2021 incorporates the Xplore and PARS businesses.
TECH SOLUTIONS
Provision of application and technology products for the financial services sector. Fees are generated from license
and consulting services relating to data management, software and infrastructure. The re-branded HUBconnect fee
generating offer will reside in this segment going forward.
CORPORATE
The provision of corporate services supports the three operating segments and therefore includes an allocation of overhead
costs. The interest in associate related to Easton Investments is recognised through the Interest and other income line in the
Corporate segment.
Consolidated – year ended 30 June 2021
Sales to external customers
Interest and other income
Expenses
Underlying EBITDA
Non-recurring revenue
Fair value gain – contingent consideration
Agility consideration share based payments expense
Share based payments – Employees and Director (including payroll tax)
Abnormal items1
Depreciation and amortisation
Interest expense
Profit before income tax
Profit before income tax on discontinued operations
Income tax expense
Profit after income tax
Platform
$
Tech
Solutions
$
Corporate
$
Total
$
101,149,649
6,633,502
-
107,783,151
2,365
-
1,325,814
1,328,179
(63,210,236)
(4,845,167)
(4,313,459)
(72,368,862)
37,941,778
1,788,335
(2,987,645)
36,742,468
173,746
-
-
-
(8,128,500)
(6,703,462)
(209,790)
-
-
-
-
-
(253,654)
(1,165)
-
173,746
1,567,978
1,567,978
(1,568,349)
(1,568,349)
(6,179,028)
(6,179,028)
-
-
(8,128,500)
(6,957,116)
(92,007)
(302,962)
23,073,772
1,533,516
(9,259,051)
15,348,237
-
-
-
-
822,536
822,536
(6,401,633)
(6,401,633)
23,073,772
1,533,516
(14,838,148)
9,769,140
Reconciliation to revenue from ordinary activities from continuing operations
Sales to external customers
Interest and other income
Non-recurring revenue
Fair value gain – contingent consideration
Revenue from ordinary activities from continuing operations
107,783,151
1,328,179
173,746
1,567,978
110,853,054
1 Abnormal items includes strategic transaction due diligence and implementation costs of $7.5 million and $0.6 million in relation to the
implementation of Private Label capability for both ClearView and IOOF and finalising the transfer of the Group’s management portfolio into a
Management Investment Scheme (MIS). Refer to page 19 within the Directors’ report for more information.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 58
Consolidated – year ended 30 June 2020
Revenue
Sales to external customers
Interest and other income
Expenses
Underlying EBITDA
Other items:
Non-recurring revenue
Fair value gain – contingent consideration
Share based payments – Employees and Director (including payroll tax)
Discount on contingent consideration
Abnormal items1
Depreciation and amortisation
Platform
$
Tech
Solutions
$
Corporate
$
Total
$
74,261,042
6,360,248
-
80,621,290
-
-
640,827
640,827
(45,596,060)
(7,244,465)
(3,199,998)
(56,040,523)
28,664,982
(884,217)
(2,559,171)
25,221,594
93,592
-
-
-
-
-
-
-
-
850,627
93,592
850,627
(4,416,131)
(4,416,131)
(97,404)
(97,404)
(1,740,651)
(10,300)
(4,879,879)
(399,701)
-
-
(1,750,951)
(5,279,580)
Agility consideration share based payments expense
-
-
(1,000,000)
(1,000,000)
Interest expense
Profit before income tax
Profit before income tax on discontinued operations
Income tax (expense)/benefit
Profit after income tax
(194,735)
(9,672)
-
(204,407)
21,943,309
(1,303,890)
(7,222,079)
13,417,340
-
-
-
-
(589,942)
(589,942)
(4,599,101)
(4,599,101)
21,943,309
(1,303,890)
(12,411,122)
8,228,297
Reconciliation to revenue from ordinary activities from continuing operations
Sales to external customers
Interest income
Non-recurring revenue
Fair value gain – contingent consideration
Waived service fees
Sub-lease rental income
Revenue from ordinary activities from continuing operations
80,621,290
640,827
93,590
850,627
269,849
33,834
82,510,017
1 Abnormal items include committed restructuring costs ($0.8m), and costs associated with the newly appointed superannuation fund trustee ($0.9m).
Note: Prior comparatives have been reclassified for presentation purposes and consistency with the current period.
MAJOR CLIENTS
During the year ended 30 June 2021, HUB24’s customer base in the Platform segment grew significantly, in line with
the increase in FUA achieved from organic growth and the impacts of the Group’s strategic transactions announced in
October 2020. The largest client accounted for approximately 6% or $6.0 million in revenue to the consolidated Group.
The client is a wealth management business, serviced by the Platform segment. (During the year ended 30 June 2020,
HUB24’s largest client accounted for approximately 4.8% or $5.3 million in revenue to the consolidated Group. The
client is a financial advice business and was serviced by the Licensee segment).
Platform segment: no client contributed 10% in external revenue to the segment during the year ended 30 June 2021
or 30 June 2020.
Tech Solutions segment: one client contributed more than 10% to the segment, with a 62% or $4.1 million external
revenue contribution (during 30 June 2020 one client contributed more than 10% to the segment, with a 53% or
$4.0 million external revenue contribution).
Discontinued operations (formerly the Licensee Service segment): no client contributed 10% in external revenue to the
segment during the year ended 30 June 2021 or 30 June 2020.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 59
6. REVENUE AND EXPENSES FROM CONTINUING OPERATIONS
KEY ACCOUNTING POLICIES
Revenue is measured at the fair value of the consideration received or receivable. The Group recognises revenue when
the amount can be reliably measured, it is probable that future economic benefits will flow to the Group and specific
criteria have been met for each of the activities.
Revenue is recognised for the major business activities as follows:
PLATFORM FEES
• FUA fee revenue is recognised and measured at the fair value of the consideration received or receivable on the
value of client account balances.
• Transaction fee revenue is recognised and measured at the fair value of the consideration received or receivable on
the date of execution of the transaction.
• Platform fees are accrued daily, paid monthly in arrears for the ongoing provision for agreed services and
transactions.
• Portfolio administration and reporting fees are accrued daily, paid monthly in arrears for the ongoing provision for
agreed non-custody related services.
• Managed discretionary account (MDA) services. Rather than delivering an off-the-shelf product, the Group focuses on
designing, implementing and operating services that incorporate the specific requirements of advisory firms, wealth
managers and stockbrokers into a private-label service. MDA fees are accrued daily and paid monthly in arrears.
• Superannuation administration services. DIY Master Pty Ltd, a provider of specialist superannuation administration
services acquired through the Xplore acquisition, allows the Group to offer superannuation administration services
to clients. The superannuation administration fees are accrued daily and paid monthly in arrears.
TECH SOLUTIONS
• Licence fee revenue is measured at the fair value of the contracted consideration received or receivable on licensed
software services provided to clients. This revenue is recognised in accordance with the performance delivery of
agreed services, within a period of 1-6 months.
• Consulting Tech Solutions fee revenue is measured at the fair value of the consideration received or receivable
on advice provided to clients on a time and materials basis. Revenue is recognised on a monthly basis and is
dependant upon time and material usage.
INTEREST INCOME
•
Interest income comprises interest on cash, short term deposits and the ORFR loan. Interest income is recognised
as it accrues in profit using the effective interest method.
(a) Revenue
Platform fees
IT Services fees
Consolidated
2021
$
2020
$
101,323,395
74,354,632
6,633,502
6,360,248
107,956,897
80,714,880
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 60
Expenses
(b) Employee benefits expenses
Wages and salaries (including superannuation & payroll tax)
Share based payments expense
Other employee benefits expenses
(c) Depreciation and amortisation
Depreciation of right-of-use assets
Depreciation of office equipment
Amortisation of intangible assets
(d) Administrative expenses
Corporate fees
Professional and consultancy fees
Information services and communication
Travel and entertainment
Transaction costs
Discount on consideration
Superfund administrative fees
Bad and doubtful debts
Other administrative expenses
7. INCOME TAX
KEY ACCOUNTING POLICIES
Consolidated
2021
$
2020
$
41,726,261
28,474,267
6,312,268
4,294,717
9,202,804
8,009,119
57,241,333
40,778,103
1,960,236
1,688,003
890,719
762,760
4,106,161
2,828,819
6,957,116
5,279,582
1,958,356
1,079,296
3,078,966
2,463,960
5,036,258
3,674,833
616,139
874,270
6,280,891
1,733,266
-
98,989
1,841,155
1,590,949
27,751
24,204
1,378,437
2,253,854
20,217,953
13,793,621
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered
from or paid to the taxation authorities based on the current year’s taxable income. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted by the reporting date.
Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all
taxable temporary differences except:
• When the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
• When the temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 61
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
• When the deductible temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the reporting date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
OTHER TAXES
Revenues, expenses and assets are recognised net of the amount of GST except:
• When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
• Receivables and payables, which are stated with the amount of GST included (UIG 1031.8). The net amount of
GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
statement of financial position; and
• Cash flows are included in the statement of cash flow on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as
part of operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
KEY ESTIMATES AND JUDGEMENTS
Recovery of deferred tax assets
Deferred tax assets are recognised for prior periods income tax losses, research and development tax offsets and
deductible temporary differences to the extent that Directors consider that it is probable that future taxable profits will
be available to offset these amounts.
The deferred tax asset continues to be recognised as at 30 June 2021 based on the following management judgements:
• The Group continues to be profitable with consistent growth, margins and profit line trends over the last 6 financials years;
• For the year ended 30 June 2021, the Group has increased profit performance and is expected to remain profitable.
The Group assumes and will continue to monitor that there will be ongoing compliance with relevant tax legislations.
RESEARCH AND DEVELOPMENT EXPENDITURE
The income tax calculation for the year ended 30 June 2021, included in the financial statements is based upon a
number of estimates. A material estimate of this calculation relates to Research and Development (R & D) expenditure.
Remuneration expenses of the development team are the largest component of the R & D expenditure, which for the
year ended 30 June 2021, comprise 73% of the total estimated R & D claim. This percentage allocation is consistent
with the actual R & D claim for the year ended 30 June 2020.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 62
(a) Income tax expense/(benefit)
Current tax payable
Deferred tax expense
Prior period deferred tax under/(over) provision
Income tax expense/(benefit)
Deferred tax included in income tax expense/(benefit) comprises:
Current tax payable
Decrease in deferred tax assets
Prior period deferred tax under/(over) provision
(Decrease)/increase in deferred tax liabilities
Tax – debited directly to equity
Consolidated
2021
$
2020
$
Notes
5,241,042
-
1,308,512
4,642,517
(147,921)
(43,416)
6,401,633
4,599,101
14
5,241,042
-
1,302,795
3,228,488
(147,921)
(542,134)
547,851
(43,416)
1,398,676
15,353
6,401,633
4,599,101
(b) Reconciliation of income tax expense/(benefit) to pre-tax accounting profit/(loss)
Profit from continuing operations before income tax expense
Prima facie income tax at 30.0%
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible expenses
Non-assessable income
Tax credits (carry forward losses, franking credit, R&D tax credits)
Prior period deferred tax under/(over) provision
Tax on discontinued operations
Income tax expense
(c) Deferred Tax Asset
Deferred tax asset comprises temporary differences attributable to:
Intangibles – other
Accrued expenses
Provisions
Depreciable assets
Carry forward tax losses
Non-refundable carry forward tax offsets
Sundry DTA
Lease liabilities – right-of-use assets
Movements:
Opening balance
Impact on adoption of new accounting standards
Additions acquired through acquisition
Recognised in the income statements
Closing balance
(d) Deferred Tax Liability
Deferred tax liability comprises temporary differences attributable to:
DTL on intangibles
Other depreciable assets – right-of-use assets
15,348,237
13,417,340
4,604,471
4,025,202
4,590,372
1,372,561
(662,685)
(1,824,775)
(147,921)
(157,829)
(362,812)
(215,450)
(43,416)
(176,984)
6,401,633
4,599,101
1,762,654
241,941
322,731
429,091
3,660,108
2,730,896
384,500
5,965,404
-
-
-
-
1,600,262
23,168
2,026,248
1,816,674
14,040,855
6,922,822
6,922,822
10,108,465
-
2,300,950
8,420,828
-
(1,302,795)
(5,486,593)
14,040,855
6,922,822
89,616
190,751
1,190,048
1,631,047
1,279,664
1,821,798
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 63
Consolidated
2021
$
2020
$
1,821,798
423,122
-
2,147,978
(542,134)
(749,302)
1,279,664
1,821,798
(547,851)
(15,353)
12,761,191
5,101,024
Movements:
Opening balance
Other depreciable assets – right-of-use assets – recognition
Recognised in the income statements
Closing balance
(e) Other disclosure items
Capital raising costs in Equity
Deferred tax asset (net of deferred tax liability)
TAX CONSOLIDATION
Members of the tax consolidated entity and the tax sharing arrangement
The Group and its 100% owned Australian resident subsidiaries have formed a tax consolidated entity. HUB24 Limited
is the head entity of the tax consolidated entity. Members of the Group have entered into a tax sharing agreement.
Tax effect accounting by members of the tax consolidated Group
The head entity and the controlled entities in the tax consolidated Group continue to account for their own current
and deferred tax amounts as per UIG 1052 Tax Consolidation Accounting. The consolidated Group has applied the
consolidated Group allocation approach in determining the appropriate amount of current taxes and deferred taxes
to allocate to members of the tax consolidated Group. The current and deferred tax amounts are measured in a
systematic manner that is consistent with the broad principles in AASB 112 Income Taxes.
In addition to its own current and deferred tax amounts, the head entity also recognises current tax liabilities (or
assets) and the deferred tax assets and liabilities arising from unused tax losses and unused tax credits (if any)
assumed from controlled entities in the tax consolidated Group.
8. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
KEY ACCOUNTING POLICIES
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less an allowance for impairment.
Collectability of trade receivables is reviewed on an ongoing basis at an operating unit level. Individual debts that are
known to be uncollectible are written off when identified. An impairment provision under the ‘simplified’ approach is
used to recognise short term trade receivables ‘lifetime expected credit losses’ from the first reporting period. These
are the credit losses expected over the term of the receivable.
The Group’s impairment model calculates expected credit losses on trade receivables using a provision matrix. Under
the model, historic provision rates with current and forward looking estimates are used.
KEY ESTIMATES AND JUDGEMENTS
Estimation of bad debts and provisioning
Receivables are assessed by management for recoverability based on days past due or pending legal actions and other
counter party information.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 64
Trade receivables
Provision for doubtful debts
Other receivables
Impairment and recoverability
Consolidated
2021
$
2020
$
14,914,817
9,945,881
(38,019)
1,756,102
(43,268)
143,468
16,632,900
10,046,081
Balances within trade and other receivables do not contain impaired assets. It is expected that these balances will be
received as and when they fall due. Refer to Note 29 for the maturity analysis.
Fair value
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.
9. RIGHT-OF-USE ASSETS
KEY ACCOUNTING POLICIES
The Group leases various property and equipment. Lease agreements are negotiated on an individual basis with
bespoke terms and conditions and are typically made for fixed periods of 2 years to 7 years.
Under AASB16, as a lessee the Group will recognise a right-of-use asset, representing its right to use the underlying
asset, and a lease liability, for all leases with a term of more than 12 months, exempting those leases where the
underlying asset is deemed to be of a low-value.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date, i.e. when the
underlying asset is first available for use.
The right-of-use asset is measured at cost less any accumulated depreciation and impairment losses and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate, being the rate that the lessee would pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments
made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a
change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate,
changes in the assessment of whether purchase; renewal or termination options are reasonably certain to be exercised.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that includes
purchase, renewal or termination options. The assessment of whether the Group is reasonably certain to exercise such
options impacts the lease term, which affects the value of lease liabilities and right-of-use assets recognised.
MODIFICATIONS TO LEASE ARRANGEMENTS
In the event that there is a modification to a lease arrangement, a determination of whether the modification results in
a separate lease arrangement being recognised needs to be made.
Where the modification does result in a separate lease arrangement needing to be recognised, due to an increase in
the scope of a lease through additional underlying leased assets and a commensurate increase in lease payments, the
measurement requirements as described above need to be applied.
Where the modification does not result in a separate lease arrangement, from the effective date of the modification,
the Group will remeasure the lease liability using the redetermined lease term, lease payments and applicable
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 65
discount rate. A corresponding adjustment will be made to the carrying amount of the associated right-of-use asset.
Additionally, where there has been a partial or full termination of a lease, the Group will recognise any resulting gain or
loss in the income statement.
AMOUNTS RECOGNISED IN THE BALANCE SHEET
This note provides information for leases where the Group is a lessee.
The Statement of Financial Position shows the following amounts relating to leases:
Right of use asset
Total right-of-use assets
Consolidated
2021
$
2020
$
6,093,322
5,436,824
6,093,322
5,436,824
The additions to right-of-use assets during the year ended 30 June 2021 were $2.66 million (FY20: nil).
These relate to services from Cisco and Dell for Group Technology infrastructure projects and acquisition of Xplore
business. An extension of a one year property lease was executed in March 2021, while related lease incentives began
in September 2020.
Current
Non-current
Total lease liabilities
30 June 2021
Within 1 year
After 1 year and less than 5 years
More than 5 years
Total
30 June 2020
Within 1 year
After 1 year and less than 5 years
More than 5 years
Total
Consolidated
2021
$
2020
$
2,204,461
1,670,311
4,549,697
4,385,270
6,754,158
6,055,581
Present value of
minimum lease
payments
$
2,204,461
4,549,697
-
6,754,158
1,670,311
4,358,270
-
6,055,581
Interest
$
(178,423)
(165,459)
-
(343,882)
(159,800)
(228,167)
-
(387,967)
Future value of
minimum lease
payments
$
2,382,884
4,715,156
-
7,098,040
1,830,111
4,613,437
-
6,443,548
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 66
AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS
The Statement of Profit or Loss and the related Notes to the Financial Statements show the following amounts relating
to leases:
Depreciation charge on right-of-use asset
Interest expense on lease liabilities
Expenses relating to short-term leases
Consolidated
2021
$
2020
$
(2,056,833)
(1,723,103)
(210,955)
(204,408)
(187,101)
(212,620)
The total cash outflow for lease payments (interest & principal) in the year ended 30 June 2021 was $2,299,410
(FY20: $1,818,661).
10. OFFICE EQUIPMENT
KEY ACCOUNTING POLICIES
Office equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the office
equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in
profit or loss as incurred.
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
reporting date.
Depreciation is calculated on a straight-line basis over the estimated useful life of the specific assets as follows:
• Office furniture and fittings – over 2.5 to 5 years
• Computer equipment – 3 years.
Year ended 30 June 2021
Cost or fair value
Accumulated depreciation
Net book amount
Computer
equipment
$
Office furniture
and fittings
$
2,836,636
(2,116,035)
720,601
2,086,073
(1,351,381)
734,692
Reconciliations of the carrying amounts at the beginning and end of the financial year:
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
631,670
505,859
-
(416,928)
720,601
1,029,959
96,379
(2,400)
(389,246)
734,692
Total
$
4,922,709
(3,467,416)
1,455,293
1,661,629
602,238
(2,400)
(806,174)
1,455,293
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 67
Total
$
4,350,707
(2,689,078)
1,661,629
1,955,564
498,365
(25,121)
(767,179)
1,661,629
Year ended 30 June 2020
Cost or fair value
Accumulated depreciation
Net book amount
Computer
equipment
$
Office furniture
and fittings
$
2,357,883
(1,726,213)
631,670
1,992,824
(962,865)
1,029,959
Reconciliations of the carrying amounts at the beginning and end of the financial year:
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
614,035
423,454
(16,140)
(389,679)
631,670
1,341,529
74,911
(8,981)
(377,500)
1,029,959
11. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ACCOUNTING POLICIES
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the acquirer’s identifiable assets, liabilities and contingent
liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the Group are assigned to those units.
When the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is
recognised. When goodwill forms part of a cash-generating unit and an operation within that unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based
on the relative values of the operation disposed of and the portion of the cash-generating unit retained. Impairment
losses recognised for goodwill are not subsequently reversed.
Intangibles
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an
intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment
losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is recognised in profit or loss in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
are amortised over the useful life and tested for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite
useful life is reviewed at least at each reporting date. Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing
the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation
expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with
the function of the intangible asset. Refer to note below, Investment Platform estimate of useful life, for detailed
information.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 68
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-
generating unit level consistent with the methodology outlined for goodwill above, such intangibles are not amortised.
The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether
indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite
to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis. The
Group had no indefinite life intangible assets in FY21 (FY20: nil)
KEY ESTIMATES AND JUDGEMENTS
Investment Platform estimate of useful life
Management have assessed the remaining useful life of the investment platform based upon the useful life of its
separate platform components.
The three components with different useful lives are:
• Core database with a useful life of 20 years;
• Applications with a useful life of 10 years;
• User Interface with a useful life of 5 years.
The assessment of useful life is a key management judgement and the useful lives adopted could change significantly
as a result of technical innovations or some other event. The amortisation charge will increase where the useful lives
are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or
sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The carrying value of intangible assets (including goodwill) is assessed annually for indications that the asset has
been impaired in accordance with the accounting policy under the heading Goodwill and Intangibles. The recoverable
amounts of cash generating units have been determined based on value-in-use calculations. These calculations
require the use of assumptions including estimated discount rates based on the current cost of capital and growth
rates of the estimated future cash flows. Details of these assumptions and the potential impact of changes to these
assumptions can be found later in this note.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets
at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Capitalisation of development costs
The Group capitalises project development costs eligible for capitalisation in relation to the Investment Platform and
Agility development projects. The capitalised costs are all directly attributable costs necessary to create, produce, and
prepare assets to be capable of operating in the manner intended. Capitalised project costs are amortised over the
project’s useful life.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 69
Consolidated
Year ended 30 June 2021
Investment
Platform
$
Goodwill
$
Agility
Connect
software
$
Agility
customer
relationship
$
Other1
$
Total
$
At cost
69,481,741
63,768,277
2,540,970
1,284,000
5,434,798
142,509,786
Accumulated amortisation and
impairment
(32,034,830)
-
(1,939,055)
(985,281)
(3,574,677)
(38,533,843)
Net carrying amount
37,446,911
63,768,277
601,915
298,719
1,860,121
103,975,943
Reconciliations of the carrying amount at the beginning and end of the financial year:
Opening carrying amount
21,417,108
16,325,588
773,891
384,067
1,062,610
39,963,264
Other additions2
5,421,889
24,152,359
Addition through acquisition3,4
14,010,322
23,290,330
Disposals through business sale
-
Amortisation and impairment from
Acquisition
Amortisation and impairment
(3,402,408)
-
-
-
-
-
-
-
-
-
-
-
-
33,351
29,607,599
1,424,081
38,724,733
(211,486)
(211,486)
-
(3,402,408)
(171,976)
(85,348)
(448,435)
(705,759)
Closing carrying amount
37,446,911
63,768,277
601,915
298,719
1,860,121
103,975,943
1 Other is comprised of Managed fund client list, Software intangibles, and Xplore Client Book.
2 Goodwill other additions $24 million relates to the goodwill reflected in the provisional fair value for the purchase price accounting (PPA) for the
acquisition of the Xplore businesses. The PPA will be finalised within 12 months of acquisition date (5 March 2021).
3
Investment Platform ‘Addition through acquisition’ $4 million relates to the Ord Minnett PARS customer contract $10.7 million and Xplore
Platform $3.3 million.
4 Goodwill addition through acquisition $23 million relates to the consolidation of the Xplore subsidiaries into the HUB24 Group.
Consolidated
Year ended 30 June 2020
Investment
Platform
$
Goodwill
$
Agility
Connect
software
$
Agility
customer
relationship
$
Other1
$
Total
$
At cost
32,340,749
16,325,588
2,540,970
1,284,000
1,891,962
54,383,269
Accumulated amortisation and im-
pairment
(10,923,641)
-
(1,767,079)
(899,933)
(829,352)
(14,420,005)
Net carrying amount
21,417,108
16,325,588
773,891
384,067
1,062,610
39,963,264
Reconciliations of the carrying amount at the beginning and end of the financial year:
Opening carrying amount
16,918,982
16,325,588
1,762,707
1,083,648
977,637
37,068,562
Other additions
Disposals through business sale
Amortisation and impairment from
Acquisition
Amortisation and impairment
6,415,916
-
(1,917,790)
-
-
-
-
-
-
-
-
-
311,043
6,726,959
-
-
(320,492)
(367,905)
(226,070)
(2,832,257)
(668,324)
(331,676)
-
(1,000,000)
Closing carrying amount
21,417,108
16,325,588
773,891
384,067
1,062,610
39,963,264
1 Other is comprised of the Dealer network, Managed fund client list and Software intangibles.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 70
Intangible assets are allocated to the Group’s cash-generating units (CGUs) as required by AASB 136.
Intangibles are associated with a CGU as listed below:
Investment Platform CGU
PARS CGU
Tech Solutions CGU
Investment Platform
Managed fund client list
Software
Goodwill on acquisitions
PARS customer relationships
Agility connect software
Agility customer relationship
Software
INVESTMENT PLATFORM (INCLUDED WITHIN INVESTMENT PLATFORM CGU)
The recoverable amount of the Investment Platform is determined based on a value-in-use calculation. This calculation
uses cash flow projections based on financial budgets approved by directors. Cash flows beyond the 5 year period are
extrapolated using a terminal value.
GOODWILL (INCLUDED WITHIN INVESTMENT PLATFORM CGU)
Goodwill recognised through acquisition is allocated to the Investment Platform CGU.
The recoverable amount of the goodwill generated has been determined based on a value-in-use calculation using a
discounted cash flow over a 5 year projection period. Cash flows beyond the 5 year period are extrapolated using a
terminal value.
AGILITY CONNECT SOFTWARE (INCLUDED WITHIN TECH SOLUTIONS CGU)
The fair market value of the Agility connect software intangible has been determined based on a value-in-use
calculation. This calculation uses cash flow projections based on financial budgets approved by directors covering a
5 year period. Cash flows beyond the 5 year period are extrapolated using a terminal value.
The recoverable amount of the Agility connect software intangible has been assessed for indicators of impairment as
at 30 June 2021 with no impairment required.
AGILITY CUSTOMER RELATIONSHIPS (INCLUDED WITHIN TECH SOLUTIONS CGU)
The fair market value of the Agility customer relationships intangible has been determined based on a value-in-use
calculation. This calculation uses cash flow projections based on financial budgets approved by directors covering a
5 year period. Cash flows beyond the 5 year period are extrapolated using a terminal value.
The recoverable amount of the Agility customer relationships intangible has been assessed for indicators of
impairment as at 30 June 2021 with no impairment required.
PARS CUSTOMER RELATIONSHIPS (INCLUDED WITHIN THE PARS CGU)
The fair market value of the PARS customer relationships intangible has been determined based on a value-in-use
calculation. This calculation uses cash flow projections based on financial budgets approved by directors covering a
5 year period. Cash flows beyond the 5 year period are extrapolated using a terminal value.
The recoverable amount of the PARS customer relationships intangible has been assessed for indicators of impairment
as at 30 June 2021 with no impairment assessed.
KEY ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS – INVESTMENT PLATFORM CGU
Cash generated by the Investment Platform has been used to assess the recoverable amount for all intangible assets
associated with the Investment Platforms CGU.
KEY ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS – INVESTMENT PLATFORM INTANGIBLE
1. Growth in FUA on the platform – Growth in the number of client accounts and hence FUA on the platform is a key
assumption used in calculating future cashflows. Management have estimated future FUA on the platform at a 5
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 71
year compound annual growth rate of 22% (FY20: 27%) with reference to current client transition rates, industry
data and pipeline monitoring.
2. Pre-tax discount rate – The pre-tax discount rate used for the Group’s value-in-use calculations is 14% (FY20: 14%)
which equates to the weighted average cost of capital over the reporting period.
3. Terminal growth rate – The terminal growth rate used for the Group’s value-in-use calculations is 2.5% (FY20: 2.5%).
4. Period over which cashflows have been discounted – Management have used a period of 5 years to discount
projected cashflows for its value-in-use calculations. This period is considered reasonable given the stage of
platform development and the remaining useful life of the core database (9 years and 5 months from 30 June 2021).
There were no other key assumptions used for the investment platform intangible value in use calculation.
Based on the above assessment there was no impairment of the investment platform intangible in FY21 (FY20: nil).
IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS – INVESTMENT PLATFORM INTANGIBLE
If the projected earnings on client account balances used in the value-in-use calculation for the investment platform
CGU are 3% lower than management estimates over the period of the value-in-use calculation, there would be no
impairment of the intangible asset.
If the pre-tax discount rate for this intangible was 2% higher than management estimates (16% instead of 14%), there
would be no impairment of the intangible asset.
KEY ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS – AGILITY CUSTOMER RELATIONSHIP AND AGILITY CONNECT SOFTWARE
1. Growth in Connect licenses, consulting income and IT infrastructure support are key assumptions used in
calculating future cash flows. Management have estimated revenue growth of the Tech Solutions CGU as a 5 year
CAGR of 4% with reference to current client license rates, industry data and pipeline monitoring.
2. Pre-tax discount rate – The pre-tax discount rate used for the company’s value-in-use calculations is 16% (FY20:
16%). This has been determined based on the weighted average cost of capital for the Tech Solutions CGU.
3. Period over which cashflows have been discounted – Management have used a period of 5 years to discount
projected cashflows for its value-in-use calculations.
4. Terminal growth rate – The terminal growth rate used for the company’s value-in-use calculations is 1.5%. (FY20:1.5%).
There were no other key assumptions used in the Customer relationship and Connect software value-in-use
calculation prepared at the date of acquisition.
Based on the above assessment there was no impairment of the Agility customer relationship or Agility connect
software for the year ended 30 June 2021 (FY20 $1 million impairment write-off).
IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS – CUSTOMER RELATIONSHIP AND CONNECT SOFTWARE
If the business EBITDA margin were 1% lower than management estimates over the period of the value-in-use
calculation, there would be no impairment of intangible assets.
If the pre-tax discount rate for this CGU had been 2% higher than management estimates (18% instead of 16%) there
would be no impairment of intangible assets.
KEY ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS – PARS CUSTOMER RELATIONSHIPS
1. Growth in non-custody accounts is a key assumption used in calculating future cash flows. Management have
estimated revenue growth of the PARS CGU as a 5 year CAGR of 44% with reference to current non-custody data
and pipeline monitoring.
2. Pre-tax discount rate – The pre-tax discount rate used for the company’s value-in-use calculations is 14.0% (FY20:
14.0%). This has been determined based on the weighted average cost of capital for the PARS CGU.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 72
3. Period over which cashflows have been discounted – Management have used a period of 5 years to discount
projected cashflows for its value-in-use calculations.
4. Terminal growth rate – The terminal growth rate used for the company’s value-in-use calculations is 2.5%. (FY20: 2.5%).
There were no other key assumptions used in the Customer relationship value-in-use calculation prepared at the date of
acquisition. Indicators of impairment have been reviewed as part of the financial year end with no impairment assessed.
IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS – PARS CUSTOMER RELATIONSHIPS
If the business EBITDA margin were 2% lower than management estimates over the period of the value-in-use
calculation, there would be no impairment of intangible assets.
If the pre-tax discount rate for this CGU had been 2% higher than management estimates there would be no
impairment of intangible assets.
Based on the above the value-in-use of the PARS Customer relationships intangibles were not considered to be impaired.
12. LOANS
ORFR loan
ORFR LOAN FACILITY
Consolidated
2021
$
7,550,000
2020
$
-
The Group advanced a loan to HTFS Holdings Pty Ltd, who used the proceeds to subscribe for capital in HTFS Holdings
Nominees Pty Ltd, a wholly owned subsidiary of EQT Holdings Limited (ASX:EQT), which is the Trustee for the HUB24
Super Fund (“the Fund”). The loan agreement is entered into on an arm’s length basis and on commercial terms at an
interest rate of 10% per annum. Repayment of the loan is subject to the Trustee continuing to meet its obligations to
the Fund, including making good any losses from operational risk events.
The capital received by the Trustee is reserved for the purpose of meeting the Operational Risk Financial Requirement
(ORFR) for the Fund in accordance with APRA Prudential Standard SPS114.
13. TRADE AND OTHER PAYABLES
KEY ACCOUNTING POLICIES
Trade creditors, deferred consideration and other payables are carried at amortised cost and represent liabilities for
goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchase of these goods and services.
Trade creditors
Deferred contingent consideration
Sundry creditors
Total trade and other payables
Consolidated
2021
$
2020
$
685,386
1,690,042
6,494
175,000
8,403,679
3,504,877
9,095,559
5,369,919
On 30 November 2020, HUB24 Limited acquired the PARS from Ord Minnett and through a part of the Administration
Agreement, will pay a royalty for each new account opened by a third party other than HUB24. As at 30 June 2021,
HUB24 Limited has recognised an amount of $6,494 within current deferred contingent consideration and $41,204
within non-current deferred contingent consideration (Note 17).
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 73
14. CURRENT PROVISIONS
KEY ACCOUNTING POLICIES
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a borrowing cost.
Employee benefits
Short-term benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled.
Long-term benefits
Liabilities for wages and salaries, including non-monetary benefits and annual and long service leave expected to be
settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting
date. They are measured at the amounts expected to be paid when the liabilities are settled.
Superannuation and other post employment benefits
All Australian employees are entitled to varying levels of benefits on retirement, disability or death. The superannuation
plans provide accumulated benefits. Employees contribute to the plans at various percentages of their wages and
salaries.
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at
the end of the respective lease term.
Third party claims
The Group estimates the provision for third party claims is in respect of on-going claims made by third parties in
respect of services provided by the Platform segment.
Restructuring Provision
The Group has reflected $725,000 in FY21 in relation to restructuring for the review of Xplore product and compliance
obligations. The Group estimated the provision for restructuring in FY20 in respect of cost obligations for the change
of HUB24 Super Fund trustee and the transfer of the Group’s management portfolio into a Management Investment
Scheme (MIS) structure.
Tax Provision
The Group estimates the provision for Tax, which is a liability to the Australian Taxation Office and expected to be
settled within the next 12 months based on an assessment of the taxable earnings of the Group calculated using
current tax legislation.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 74
Employee benefits – Short term incentive
Employee benefits – Annual leave
Restructuring provision
Third party claims
Lease make good
Tax provision
Consolidated
2021
$
2020
$
6,012,277
4,563,494
3,772,201
2,260,329
725,000
316,510
50,899
5,241,042
662,349
300,000
24,882
-
16,117,929
7,811,054
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
Consolidated
2021
Tax
provision
$
Third party
claims
$
Rental lease
liability
$
Lease make
good
$
Restructuring
provision
$
Carrying amount at the start of the year
-
Additional provisions recognised/(released)
5,241,042
Additional provisions recognised
-
300,000
16,510
-
Carrying amount at the end of the year
5,241,042
316,510
-
-
-
-
-
-
-
-
-
-
361,646
(361,646)
300,000
300,000
-
-
2020
Carrying amount at the start of the year
Additional provisions recognised/(released)
Additional provisions recognised
Carrying amount at the end of the year
15. BORROWINGS
Guaranteed
Bank loans – Current liabilities
Bank loans – Non-current liabilities
Total secured non-current borrowings
24,882
26,017
-
50,899
24,882
-
-
24,882
662,349
(662,349)
725,000
725,000
-
-
662,349
662,349
Consolidated
2021
$
2020
$
3,125,000
9,375,000
12,500,000
-
-
-
The amortising ANZ bank loan facility was secured specifically for the strategic transactions. The loan was fully drawn
down on 18 February 2021 with principal repayments of $3.125 million payable every calendar year in February and
the amount outstanding at termination date (23 November 2023) payable. The bank loan facility may not be redrawn
once it has been repaid.
The Group incurs a commitment fee of 0.40% per annum to maintain the loan facility with an interest rate of 1 month
BBSY + 1.95% applied to any drawn balances and paid quarterly.
The loan facility is guaranteed by HUB24 Limited and its operating subsidiaries: Agility Applications Pty Ltd; HUB24
Management Services Pty Ltd; HUB24 Administration Pty Ltd; HUB24 Custodial Services Ltd; HUB24 Services Pty Ltd;
HUBconnect Pty Ltd. Regulatory capital requirements are excluded from the collateral and guarantee commitments.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 75
The $5 million overdraft facility remains available to the Group to assist with working capital requirements. The facility
was undrawn throughout the year. The Group incurs a commitment fee of 0.60% per annum to maintain the overdraft
facility with an interest rate of 1 month BBSY + 1.25% applied to any drawn balances and paid quarterly.
The bank loan facility and overdraft facility have common and referrable security charges with each facility.
Further information relating to loans from related parties is set out in note 26.
16. NON-CURRENT PROVISIONS
Employee benefits – long service leave
Employee benefits – deferred short term incentive
Lease make good provision
EMPLOYEE BENEFITS – DEFERRED SHORT TERM INCENTIVE
Consolidated
2021
$
2020
$
1,882,344
1,133,111
400,872
64,652
265,000
115,551
2,347,868
1,513,662
The provision represents the portion of STI bonus relating to the financial year ending 30 June 2021 payable to senior
staff members that has been deferred until after the FY22 financial year end.
LEASE MAKE GOOD
The provision represents the present value of the estimated costs to make good the premises leased by the Group at
the end of the respective lease term.
MOVEMENTS IN PROVISIONS
Movements in each class of provision during the financial year, other than employee benefits for long service leave, are
set out below:
Consolidated
2021
Carrying amount at start of year
Provisions (utilised)
Additional provisions recognised
Provisions reclassified/(released) during the year
Carrying amount at end of period
2020
Carrying amount at start of year
Provisions (utilised)
Additional provisions recognised
Provisions reclassified/(released) during the year
Carrying amount at end of period
Employee benefits
– deferred short-
term incentive
$
Lease make
good
$
Rental lease
liability
$
265,000
(265,000)
679,472
(278,600)
400,872
-
-
265,000
-
115,551
(50,899)
-
-
64,652
-
-
-
-
-
115,551
110,047
-
-
-
-
(110,047)
-
-
265,000
115,551
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 76
17. OTHER NON-CURRENT LIABILITIES
Deferred contingent consideration
Consolidated
2021
Carrying amount at start of year
Deferred consideration through acquisition of PARS
Fair value gain on contingent consideration
Carrying amount at end of period
2020
Carrying amount at start of year
Provisions reclassified/(released) during the year
Unwinding of discount
Fair value gain on contingent consideration
Carrying amount at end of period
Note: Refer to note 13 for current liability deferred consideration.
DEFERRED CONTINGENT CONSIDERATION – AGILITY
Consolidated
2021
$
2020
$
41,204
1,567,978
41,204
1,567,978
Contingent consideration
$
1,567,978
41,204
(1,567,978)
41,204
2,146,200
(175,000)
97,404
(500,626)
1,567,978
During the financial year ended 30 June 2021 the terms of a ‘fourth deed of amendment to the share sale deed’
relating to the shares in the capital of Agility Applications Pty Ltd (Deed) between HUB24 Limited (the Purchaser), the
shareholders of Agility Applications Pty Ltd and others (the Vendors) were finalised and settled.
Under the terms of the deed, HUB24 (on 29 September 2020) issued 109,752 fully paid ordinary shares to the
Vendors equal to the value of $1,568,348 with the number of ordinary shares determined by taking the VWAP of the
Purchaser’s ordinary shares in the 20 day period up to 24 August 2020 ($14.29). As a result of the amendment to
the share sale deed the accounting treatment of a contingent payment is altered from additional purchase price to
compensation to the seller. The impact is the write back of the liability of the $1,567,978 and proportionally recognised
share based payment expense in the statement of profit or loss.
For the financial year ended 30 June 2021, $1,568,349 has been recognised as an expense in the statement of profit or
loss. Shares have been issued and recognised in the Group’s share capital, with 50% vesting on 31 December 2021 for
tranche 1 and 50% vesting on 31 December 2022 for tranche 2.
18. ISSUED CAPITAL
KEY ACCOUNTING POLICIES
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new equity instruments
are shown in equity as a deduction, net of GST from the proceeds.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 77
Issued and paid up capital
Ordinary shares, fully paid
Other equity securities
Treasury shares
Total capital
Movements in issued and paid up capital
Beginning of the financial year
Shares issued
Transfer from share based payment reserve
Additional paid up capital
Total shares
Capital raising costs
End of the period
Movement in other equity securities – treasury shares
Beginning of the financial year
Employee share issue
Shares purchased on-market
End of the period
2021
Number
2020
Number
Consolidated
2021
$
2020
$
68,333,179
62,846,130
204,227,168
100,172,838
(212,158)
(39,636)
(5,012,790)
(26,790)
68,121,021
62,806,494
199,214,378
100,146,048
62,846,130
62,329,415
100,172,838
98,225,656
4,988,495
516,715
103,318,937
1,242,371
498,554
-
-
-
1,603,781
447,052
516,144
200,534
68,333,179
62,846,130
205,542,608
100,184,705
-
-
(1,315,440)
(11,867)
68,333,179
62,846,130
204,227,168
100,172,838
39,636
(40,439)
212,961
212,158
56,596
(16,960)
26,790
(26,386)
-
5,012,386
38,256
(11,466)
-
39,636
5,012,790
26,790
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
ORDINARY SHARES – FOR THE YEAR ENDED 30 JUNE 2021
On 30 September 2020, the Group issued 68,847 ordinary shares for options exercised by employees of the Group for
consideration of $343,322.
On 15 October 2020, the Group issued 120,000 ordinary shares for options exercised by employees of the Group for
consideration of $295,200.
On 26 October 2020, the Group issued 109,752 ordinary shares relating to the purchase of Agility Applications Pty Ltd.
These shares are restricted for 12 months for 50% of the shares and 24 months for the remaining 50%. Holders of the
shares are entitled to rights and benefits in line with other ordinary shareholders.
On 5 November 2020, the Group issued 2,500,000 ordinary shares under a share purchase plan for consideration of
$50,000,000.
On 30 November 2020, the Group issued 999,999 ordinary shares under a share purchase plan for consideration of
$19,999,980.
On 30 November 2020, the Group issued 309,707 ordinary shares for options and PARs exercised by employees of the
Group for consideration of $1,358,055.
On 2 March 2021, the Group issued 1,378,744 ordinary shares as HUB24 Limited script consideration for the purchase
of Xplore.
ORDINARY SHARES – FOR THE YEAR ENDED 30 JUNE 2020
On 31 July 2019, the Group issued 260,000 ordinary shares for options exercised by employees of the Group for
consideration of $478,800.
On 4 November 2019, the Group issued 202,169 ordinary shares for options and performance rights (PARs) exercised
by employees of the Group for consideration of $489,796.
On 25 November 2019, the Group issued 4,546 ordinary shares for options and PARs exercised by employees of the
Group for consideration of $15,276.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 78
On 14 February 2020, the Group issued 50,000 ordinary shares for options exercised by employees of the Group for
consideration of $258,500.
TREASURY SHARES
Treasury shares are shares in HUB24 Limited that are held by HUB24 Employee Share Trust (previously HUB24
Employee Share Ownership Trust) for the purpose of issuing shares under HUB24 Employee Share Ownership Plan.
On 1 July 2020, 1,599 shares were added from previous issues have not been taken up by employees.
On 2 October 2020, 4,787 shares were utilised in the course of employee options being exercised.
On 18 November 2020, company transferred 13,224 shares to eligible employees under the HUB24 Employee Share
Ownership Plan.
On 30 November 2020, 22,626 shares were utilised in the course of employee options being exercised.
On 13 April 2021, the company transferred 696 shares to eligible employees under the HUB24 Employee Share
Ownership Plan.
On 26 April 2021, the company transferred 705 shares to eligible employees under the HUB24 Employee Share
Ownership Plan.
During April 2021 the Group purchased 212,961 shares on market through Pacific Custodians Pty Ltd:
• On 9 April 2021, the company purchased 45,512 shares on-market.
• On 16 April 2021, the company purchased 50,000 shares on-market.
• On 19 April 2021, the company purchased 33,621 shares on-market.
• On 20 April 2021, the company purchased 83,828 shares on-market.
19. RESERVES
GENERAL RESERVES
Share based payments share reserve
Movements in share based payments share reserves:
Opening balance
Reserve reclassified to share capital through options exercised
Employee share based payment expense
Shares issued through HUB24 Share Ownership Trust
Closing balance
20. RECONCILIATION OF CASH FLOWS
KEY ACCOUNTING POLICIES
Cash and cash equivalents
Consolidated
2021
$
2020
$
11,507,257
8,823,118
8,823,118
5,256,545
(1,603,780)
(516,144)
4,515,919
4,294,717
(228,000)
(212,000)
11,507,257
8,823,118
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are shown within
borrowings current liabilities in the balance sheet.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 79
Consolidated
2021
$
2020
$
9,769,140
8,228,297
6,971,173
5,322,539
6,312,268
4,294,717
(1,567,978)
578,796
(850,627)
(358,765)
(1,388,799)
-
-
-
25,121
1,000,000
(7,250,313)
(2,480,615)
1,160,591
4,599,672
(6,446,717)
(8,178,307)
2,867,714
2,656,849
8,159,163
10,999,498
19,165,038
25,258,379
63,461,183
33,809,323
(a) Reconciliation of the net profit/(loss) after tax to cash flow from operations
Net profit/(loss) after tax for the year
Non-cash items:
Depreciation and amortisation
Share based payment expense – Employee
Fair value (gains)/losses
Deferred (revenue)/expenses
Gain on sale of Paragem
Loss on disposal of office equipment
Impairment of intangible
Changes in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in deferred tax assets
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash flow from operating activities
(b) Reconciliation of cash and cash equivalents
Cash and cash equivalents comprises:
Cash on hand and at bank
(c) Terms and conditions
For the purposes of the Statement of cash flows, cash and cash equivalents includes cash on hand and at bank, deposits held at
call with financial institutions, other short term, highly liquid investments with maturities of three months or less, that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts.
(d) Details of Paragem assets and liabilities which were disposed of in FY21.
Assets
Cash and cash equivalents
Trade and other receivables
Intangibles
Other current assets
Office equipment
Total assets
Liabilities
Provisions
Trade and other payables
Total liabilities
Net assets
Consideration received (net of costs and working capital transferred)
Gain on disposal
Reconciliation of cash proceeds from disposal
Cash proceeds received1
Less: Cash deconsolidated
Net cash flow from operating activities
1 Consideration received was shares within Easton.
1,332,270
52,149
211,486
116,255
6,625
1,718,785
(133,433)
(331,461)
(464,894)
1,253,891
2,642,690
1,388,799
-
(1,332,270)
(1,332,270)
-
-
-
-
-
-
-
-
-
-
-
-
-
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 80
21. COMMITMENTS AND CONTINGENCIES
The Group had no commitments or contingencies as at 30 June 2021 (FY20 nil).
22. SHARE BASED PAYMENTS
KEY ACCOUNTING POLICIES
Equity settled transactions
The Group provides benefits to employees (including Directors) in the form of share-based payments, whereby
services are rendered in exchange for shares or rights over shares (equity settled transactions).
There are currently three plans in place to provide these benefits:
• The Employee Share Option Plan (ESOP);
• The Performance Rights (PARs); and
• The Employee Share Plan (ESP).
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by reference to the active market for
the shares which trade on the Australian Securities Exchange, at grant date.
In valuing equity settled transactions, no account is taken of any vesting conditions, other than (if applicable):
• Non-vesting conditions that do not determine whether the Group receives services that entitle the employee to
receive payment in equity or cash;
• Conditions that are linked to the price of the shares of HUB24.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the entity’s
best estimate of the number of equity instruments that will ultimately vest. The income statement expense or credit for
a period is recorded in Employee Benefits Expense and represents the movement in cumulative expense recognised
as at the beginning and end of that period.
At each subsequent reporting date until vesting, the cumulative charge to the statement of profit or loss and other
comprehensive income is the product of:
• The grant date fair value of the award;
• The current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of
employee turnover during the vesting period and the likelihood of non-market performance conditions being met; and
• The expired portion of the vesting period.
The charge to the consolidated statement of profit or loss and other comprehensive income for the period is
the cumulative amount as calculated above less the amounts already charged in previous periods. There is a
corresponding entry to equity.
Equity settled awards granted by the Group to employees of subsidiaries are recognised in the parent’s separate financial
statements as an additional investment in the subsidiary with a corresponding credit to equity. As a result, the expense
recognised by the Group in relation to equity-settled awards only represents the expense associated with grants to
employees of the parent. The expense recognised by the Group is the total expense associated with all such awards.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than
were originally anticipated to do so. Any award subject to a market condition or non-vesting condition is considered to vest
irrespective of whether or not that market condition or non-vesting is fulfilled, provided that all other conditions are satisfied.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 81
If a non-vesting condition is within the control of the Group or the employee, the failure to satisfy the condition is
treated as a cancellation. If a non-vesting condition within the control of the Group or employee is not satisfied during
the vesting period, any expense for the award not previously recognised is recognised over the remaining vesting
period, unless the award is forfeited.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. An additional expense is recognised for any modification that increases the total fair value of the share-
based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award
and designed as a replacement award on the date that it is granted, the cancelled and new award are treated as if they
were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted
earnings per share.
KEY ESTIMATES AND JUDGEMENTS
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the
date at which they were granted. The fair value is determined using a monte carlo simulation method. The accounting
estimates and assumptions relating to the equity-settled share-based payments would have no impact on the carrying
amounts of assets or liabilities within the next annual reporting period but may impact expenses and equity.
RECOGNISED SHARE-BASED PAYMENT EXPENSES
The expense recognised from equity-settled share-based payment transactions during the year is $6,312,268
(FY20: $4,294,717).
TYPES OF SHARE-BASED PAYMENT PLANS
1. Share based payment plans issued during the year ended 30 June 2021.
Tax Exempt Share Plan – Employees
Number of Shares Issued
13,224
Issue Date
Issue Price
21 October 2020
$17.16
Vesting Conditions for
All Shares
Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that
needs to be satisfied in order to acquire the shares
Voting
Dividends
Specific Terms
Shareholders are entitled to vote.
The shares provide entitlement to dividends or other distributions paid to ordinary shareholders
The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise
encumbered, on or before the 3rd anniversary of the date employees acquired the Shares or the date
they cease to be employed, whichever occurs first
Tax Exempt Share Plan – Employees
Number of Shares Issued
696
Issue Date
Issue Price
17 December 2020
$17.16
Vesting Conditions for
All Shares
Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that
needs to be satisfied in order to acquire the shares
Voting
Dividends
Specific Terms
Shareholders are entitled to vote
The shares provide entitlement to dividends or other distributions paid to ordinary shareholders
The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise
encumbered, on or before the 3rd anniversary of the date employees acquired the Shares or the date
they cease to be employed, whichever occurs first
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 82
Options & Rights – Key Management Personnel (excluding MD)
Issue Date
Options
4 Feb 2021
Number of Options Issued 57,826
Rights
4 Feb 2021
54,071
Expiry Date
4 February 2026
4 February 2036
Expected Vesting Period
Exercise Price
Vesting Conditions
3 years
$14.29
3 years
-
I. Service
II. Market
III. FUA
[I] Must be an employee at date of issue
[II] 50% of the options and 50% of the performance rights will be subject to, and will vest on, the
achievement of a hurdle measuring the Absolute Total Shareholder Return (ATSR) of 11.5% to 16.5%
over the next three years. The vesting is calibrated as follows: 25% vesting occurs when a threshold
of 11.5% ASTR compounded annually is achieved; 100% vesting occurs when a threshold of 16.5%
ASTR compounded annually is achieved; and vesting between 25% and 100% will be on a straight-
line basis between the two levels.
Thresholds
Determination of the TSR thresholds was $14.29, therefore the 11.5% threshold is $19.81 and the
16.5% threshold is $22.59, or $22.09 and $26.32 respectively when tested over a four year periods.
[II] 100% of the performance rights will be subject to, and will vest on, the achievement of a hurdle
measuring the compound annual growth (CAGR) in FUA over the next three years. The vesting
is calibrated as follows: zero vesting will occur if the FUA is below a minimum level of 26.8% (an
increase of 103.9% over three years representing approximately $35 billion by 30 June 2023); 50%
vesting will occur if the FUA reaches 26.8% per annum; 100% vesting will occur if the FUA reaches
35.7% per annum (an increase of 150% over three years representing approximately $43 billion by
30 June 2023); and vesting for between 26.8% and 35.7% per annum (for between 50% and 100%
vesting) will be on a straight-line basis between the two levels.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
Options & Rights – MD
Options
Issue Date
24 December 2020
Number of Options Issued 33,558
Expiry Date
24 December 2025
Expected Vesting Period
Exercise Price
Vesting Conditions
3 years
$14.29
Rights
24 December 2020
31,395
24 December 2035
3 years
-
I. Service
II. Market
[I] Must be an employee at date of issue
[II] 50% of the options and 50% of the performance rights will be subject to, and will vest on, the
achievement of a hurdle measuring the Absolute Total Shareholder Return (ATSR) of 11.5% to 16.5%
over the next three years. The vesting is calibrated as follows: 25% vesting occurs when a threshold
of 11.5% ASTR compounded annually is achieved; 100% vesting occurs when a threshold of 16.5%
ASTR compounded annually is achieved; and vesting between 25% and 100% will be on a straight-
line basis between the two levels.
Thresholds
Determination of the TSR thresholds was $14.29, therefore the 11.5% threshold is $19.81 and the
16.5% threshold is $22.59, or $22.09 and $26.32 respectively when tested over a four year periods.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 83
III. FUA
[II] 100% of the performance rights will be subject to, and will vest on, the achievement of a hurdle
measuring the compound annual growth (CAGR) in FUA over the next three years. The vesting
is calibrated as follows: zero vesting will occur if the FUA is below a minimum level of 26.8% (an
increase of 103.9% over three years representing approximately $35 billion by 30 June 2023); 50%
vesting will occur if the FUA reaches 26.8% per annum; 100% vesting will occur if the FUA reaches
35.7% per annum (an increase of 150% over three years representing approximately $43 billion by
30 June 2023); and vesting for between 26.8% and 35.7% per annum (for between 50% and 100%
vesting) will be on a straight-line basis between the two levels.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
Rights – Employees
Issue Date
4 February 2021
Number issued
82,700
Expiry date
4 February 2036
Expected Vesting Period
3 years
Exercise Price
I. Service
II. FUA
-
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] 100% of the performance rights will be subject to, and will vest on, the achievement of a hurdle
measuring the compound annual growth (CAGR) in FUA over the next three years. The vesting
is calibrated as follows: zero vesting will occur if the FUA is below a minimum level of 26.8% (an
increase of 103.9% over three years representing approximately $35 billion by 30 June 2023); 50%
vesting will occur if the FUA reaches 26.8% per annum; 100% vesting will occur if the FUA reaches
35.7% per annum (an increase of 150% over three years representing approximately $43 billion by
30 June 2023); and vesting for between 26.8% and 35.7% per annum (for between 50% and 100%
vesting) will be on a straight-line basis between the two levels.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
Special 5 Year LTI Performance Rights – Employees
Special LTI – Tranche 1
Special LTI – Tranche 2
Issue Date
Number issued
Expiry Date
2 March 2021
565,000
30 June 2025
Expected Vesting Period
5 years
Exercise Price
-
127,500
-
Performance Period
1 July 2020 to 30 June 2025
1 July 2020 to 30 June 2025
Performance Conditions1
Zero vesting will occur if the CAGR in FUA is
below a minimum level of 23.8% per annum (an
increase of 191% over five years representing
approximately $50 billion by 30 June 2025). 50%
vesting will occur if the CAGR in FUA reaches
23.8% per annum. 100% vesting will occur if the
CAGR in FUA reaches 28.4% per annum; and
vesting between 23.8% and 28.4% (representing
approximately $60 billion by 30 June 2025) per
annual CAGR in FUA will be on a straight-line
basis between these two levels
Zero vesting will occur if the CAGR in FUA is
below a minimum level of 32.4% per annum (an
increase of 307% over five years representing
approximately $70 billion by 30 June 2025). 100%
vesting will occur if the CAGR in FUA reaches
32.4% per annum.
1
In measuring the achievement of performance and FUA targets, the Board reserves the right to vary the percentage of options and ordinary
performance rights which may vest as well as the FUA dollar thresholds to account for acquisitions of businesses, assets, companies or other entities
which may be undertaken by the Group during the performance period and adjust for non-custodial FUA on a proportionality basis.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 84
Special 5 Year LTI Performance Rights – MD
Issue Date
Number issued
Expiry Date
Special LTI – Tranche 1
24 December 2020
220,000
30 June 2025
Expected Vesting Period
5 years
Exercise Price
-
Special LTI – Tranche 2
50,000
-
Performance Period
1 July 2020 to 30 June 2025
1 July 2020 to 30 June 2025
Performance Conditions1
Zero vesting will occur if the CAGR in FUA is below
a minimum level of 23.8% per annum (an increase
of 191% over five years representing approximately
$50 billion by 30 June 2025). 50% vesting will occur if
the CAGR in FUA reaches 23.8% per annum. 100%
vesting will occur if the CAGR in FUA reaches 28.4%
per annum; and vesting between 23.8% and 28.4%
(representing approximately $60 billion by 30 June
2025) per annual CAGR in FUA will be on a straight-
line basis between these two levels
Zero vesting will occur if the CAGR in FUA is
below a minimum level of 32.4% per annum (an
increase of 307% over five years representing
approximately $70 billion by 30 June 2025). 100%
vesting will occur if the CAGR in FUA reaches
32.4% per annum.
1
In measuring the achievement of performance and FUA targets, the Board reserves the right to vary the percentage of options and ordinary
performance rights which may vest as well as the FUA dollar thresholds to account for acquisitions of businesses, assets, companies or other entities
which may be undertaken by the Group during the performance period and adjust for non-custodial FUA on a proportionality basis.
2. Share based payment plans issued during the year ended 30 June 2020.
Tax Exempt Share Plan – Employees
Number of Shares Issued
16,960
Issue Date
Issue Price
10 October 2019
$12.50
Vesting Conditions for
All Shares
Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that
needs to be satisfied in order to acquire the shares.
Voting
Dividends
Specific Terms
Shareholders are entitled to vote.
The shares provide entitlement to dividends or other distributions paid to ordinary shareholders.
The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or
otherwise encumbered, on or before the 3rd anniversary of the date employees acquired the
Shares or the date they cease to be employed, whichever occurs first.
Options and Rights – Employees
Share Ownership Plan
Issue Date
25 Nov 2019
Number of Options Issued 323,151
PARs (Rights)
25 Nov 2019
129,404
Expiry Date
25 November 2024
25 November 2034
Expected Vesting Period
Exercise Price
Vesting Conditions
3 years
$12.36
3 years
nil
I. Service
II. Market
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] 50% of the options and performance rights will be subject to, and will vest on, the achievement
of a hurdle measuring the Absolute Total Shareholder Return (ATSR) of 12.5% to 17.5% over the
next three years. The vesting is calibrated as follows: 25% vesting occurs when a threshold of 12.5%
ASTR compounded annually is achieved; 100% vesting occurs when a threshold of 17.5% ASTR
compounded annually is achieved; and vesting between 25% and 100% will be on a straight line
basis between the two levels.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 85
III. FUA
[III] 50% of the options and 50% of the performance rights will be subject to, and will vest on, the
achievement of a hurdle measuring the compound annual growth (CAGR) in FUA over the next
three years. The vesting is calibrated as follows: zero vesting will occur if the FUA does not exceed
$27 billion by 30 June 2022; 25% vesting will occur if the FUA reaches $27 billion by 30 June 2022;
80% vesting will occur if the FUA reaches $29 billion by 30 June 2022; 100% vesting will occur if
the FUA reaches $32 billion by 30 June 2022. vesting for between $27 billion and $29 billion (for
between 25% and 80%) will be on a straight line basis between the two levels; and vesting for
between $29 billion and $32 billion (for between 80% and 100%) will be on a straight line basis
between the two levels;
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for associated
tax liabilities.
Options and Rights – Employees
Share Ownership Plan
Issue Date
25 Nov 2019
Number of Options Issued 8,181
PARs (Rights)
25 Nov 2019
3,276
Expiry Date
25 November 2024
25 November 2034
Expected Vesting Period
Exercise Price
Vesting Conditions
I. Service
II. Leadership
III. Strategy
3 years
$12.36
3 years
nil
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] Effective leadership of the Group’s Legal and Compliance functions together with the
development of enhancements to these functions.
[III] Effective leadership and management of key legal and compliance matters across the Group such that
the contribution of the Legal & Compliance team through its management of these matters supports the
Group in achieving is strategic outcomes and priorities.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
3. Share based payment plans issued during the year ended 30 June 2019.
Tax Exempt Share Plan – Employees
14,193
Number of Shares Issued
7 September 2018
Issue Date
$12.04
Issue Price
Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that
Vesting Conditions for
needs to be satisfied in order to acquire the shares.
All Shares
Shareholders are entitled to vote.
Voting
The shares provide entitlement to dividends or other distributions paid to ordinary shareholders.
Dividends
The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise
Specific Terms
encumbered, on or before the 3rd anniversary of the date employees acquired the Shares or the date
they cease to be employed, whichever occurs first.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 86
Options and Rights – Employees
Share
Ownership
Plan
PARs
(Rights)
Share
Ownership
Plan –
Paragem
PARs
(Rights) –
Paragem
Share
Ownership
Plan
PARs
(Rights)
Issue Date
7 Sep 2018
7 Sep 2018
7 Sep 2018
7 Sep 2018
7 Sep 2018
7 Sep 2018
Number of Options Issued 257,852
70,888
12,000
4,000
30,000
10,000
Expiry Date
7 Sep 2023
7 Sep 2033
7 Sep 2023
7 Sep 2033
7 Sep 2023
7 Sep 2033
Expected Vesting Period
Exercise Price
Vesting Conditions
I. Service
II. Market
III. FUA
3 years
$12.04
3 years
nil
2 years
$12.04
2 years
nil
2 years
$11.73
2 years
nil
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] 50% vesting on the achievement of Performance condition 2. Absolute Total Shareholder Return
(ATSR) CAGR in excess of 17.5% over three years, proportional vesting between 12.5% and 17.5%.
[III] 50% vesting on the
achievement of Performance
condition 1. Growth in FUA
CAGR in excess of 115.8%
over three years, proportional
vesting between 29.23% and
40.23% p.a.
[III] 0% vesting if the CAGR in
FUA was below a minimum
level of 25.88% p.a (99.5%
over three years). 50% vesting
will occur if the CAGR in FUA
reaches 29.58% p.a (117.6%
over three years). 100% vesting
will occur if the CAGR in FUA
reaches 33.09% p.a (135.7%
over three years)
[III] 0% vesting if the CAGR in
FUA was below a minimum
level of 25.88% p.a (99.5%
over three years). 50% vesting
will occur if the CAGR in FUA
reaches 29.58% p.a (117.6%
over three years). 100%
vesting will occur if the CAGR
in FUA reaches 33.09% p.a
(135.7%over three years)
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
Options and Rights – Employees
Share Ownership Plan
– MD
PARs (Rights) –
MD
Share Ownership Plan
– CFO
PARs (Rights) -
CFO
Issue Date
12 Dec 2018
12 Dec 2018
12 Dec 2018
Number of Options Issued 51,186
14,072
24,667
Expiry Date
12 Dec 2023
12 Dec 2033
12 Dec 2023
Expected Vesting Period
Exercise Price
Vesting Conditions
3 years
$12.04
3 years
nil
3 years
$13.44
12 Dec 2018
6,981
12 Dec 2033
3 years
nil
I. Service
II. Market
III. FUA
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] 50% vesting on the achievement of Performance condition 2. Absolute Total Shareholder Return
(ATSR) CAGR in excess of 17.5% over three years, proportional vesting between 12.5% and 17.5%.
[III] 50% vesting on the achievement of Performance condition 1. Growth in FUA CAGR in excess of
115.8% over three years, proportional vesting between 29.23% and 40.23% p.a.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 87
Options and Rights – Employees
PARs (Rights) – Director
Issue Date
12 Dec 2018
Number of Options Issued 20,000
Expiry Date
12 Dec 2033
Expected Vesting Period
3 years
Exercise Price
nil
Vesting Conditions
I. Service
II. Market
III. Growth
[I] Must be a director from date of issue until options are exercised, unless considered a good leaver
(in which case must exercise within 30 days)
[II] Performance condition (a) stipulates that the director must provide support to the HUB24
Managing Director and KMPs in relation to the securing and maintenance of key accounts over the
period from 1 July 2018 to 30 June 2021.
[III] Performance condition (b) stipulates that the director must directly liaise with key accounts
to facilitate growth and customer satisfaction as measured by the improvement in the company’s
customer satisfaction service levels over the period from 1 July 2018 to 30 June 2021
Options and Rights – Employees
PARs (Rights) – Head of Legal & Compliance
Issue Date
12 Dec 2018
Number of Options Issued 20,000
Expiry Date
12 Dec 2033
Expected Vesting Period
4 years
Exercise Price
nil
Vesting Conditions
I. Service
II. Market
III. Growth
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] Performance condition (a) stipulates that the employee must display effective leadership of the
development and operation of the Group’s risk and compliance framework and policies over the
Performance Period.
[III] Performance condition (b) stipulates that the employee must display effective leadership and
management of key legal, risk and compliance matters across the HUB24 Group.
Options and Rights – Employees
PARs (Rights) – Special LTI
Issue Date
12 Dec 2018
Number of Options Issued 425,000
Expiry Date
12 Dec 2033
Expected Vesting Period
4 years
Exercise Price
nil
Vesting Conditions
I. FUA
[I] Applying to 425,000 performance rights, 100% vesting will occur if the 4 year CAGR in FUA
reaches 33% per annum.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 88
4. Share based payment plans issued prior to 1 July 2018.
Tax Exempt Share Plan – Employees
Number of Shares Issued
24,160
Issue Date
Issue Price
1 September 2017
$6.25
Vesting Conditions for
All Shares
Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that
needs to be satisfied in order to acquire the shares.
Voting
Dividends
Specific Terms
Shareholders are entitled to vote.
The shares provide entitlement to dividends or other distributions paid to ordinary shareholders.
The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise
encumbered, on or before the 3rd anniversary of the date employees acquired the shares or the date
they cease to be employed, whichever occurs first.
Options and Rights – Employees
Share
Ownership
Plan
PARs
(Rights)
Share
Ownership
Plan
PARs
(Rights)
Share
Ownership
Plan – MD
PARs
(Rights) –
MD
Issue Date
11 Oct 2017
11 Oct 2017
21 Aug 2017
21 Aug 2017
11 Dec 2017
11 Dec 2017
Number of Options Issued 401,686
122,942
34,247
11,211
78,077
23,897
Expiry Date
11 Oct 2022
11 Oct 2032
21 Aug 2022
21 Aug 2032
11 Dec 2022
11 Dec 2032
Expected Vesting Period
3 years
3 years
Exercise Price
$7.09
nil
3 years
$6.25
3 years
nil
3 years
$7.09
3 years
nil
Vesting Conditions
I. Service
II. Market
III. FUA
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days).
[II] 50% vesting on the achievement of Performance condition 2. Absolute Total Shareholder Return
(ATSR) CAGR in excess of 17.5% over three years, proportional vesting between 12.5% and 17.5%.
[III] 50% vesting on the
achievement of Performance
condition 1. Growth in FUA
CAGR in excess of 117.6%
over three years, proportional
vesting between 25.88% and
33.09% p.a.
[III] 50% vesting on the
achievement of Performance
condition 1. Growth in FUA
CAGR in excess of 109.7% over
three years, proportional vesting
between 28% and 45% p.a.
[III] 50% vesting on the
achievement of Performance
condition 1. Growth in FUA
CAGR in excess of 117.6%
over three years, proportional
vesting between 25.88% and
33.09% p.a.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
5. Share based payment plans issued prior to 1 July 2017.
Tax Exempt Share Plan – Employees
Number of Shares Issued
14,112
Issue Date
Issue Price
1 September 2016
$4.46
Vesting Conditions for All
Shares
Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that
needs to be satisfied in order to acquire the shares.
Voting
Dividends
Specific Terms
Shareholders are entitled to vote.
The shares provide entitlement to dividends or other distributions paid to ordinary shareholders.
The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or
otherwise encumbered, on or before the 3rd anniversary of the date employees acquired the shares
or the date they cease to be employed, whichever occurs first.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 89
Options and Rights – Employees
Share Ownership Plan
PARs (Rights)
Share Ownership Plan
FY 2017
Issue Date
29 Nov 2016
Number of Options Issued 418,639
Expiry Date
29 Nov 2021
Expected Vesting Period
3 years
Exercise Price
$4.46
Vesting Conditions
29 Nov 2016
137,043
29 Nov 2031
3 years
nil
29 Nov 2016
50,000
29 Nov 2021
3 years
$5.17
I. Service
II. Market
III. FUA
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] 50% vesting on the achievement of Performance condition 1.
Absolute Total Shareholder Return (ATSR) CAGR in excess of 17.5%
over three years, proportional vesting between 12.5% and 17.5%.
[II] Achieve share price hurdle
of 52% greater than exercise
price for 20 consecutive days in
the period between 36 months
from the issue date and expiry
of options.
[III] 50% vesting on the achievement of Performance condition
2. Growth in FUA CAGR in excess of 45% over three years,
proportional vesting between 28% and 45%.
N/A
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
Options and Rights – Employees
Share Ownership Plan
PARs (Rights) – MD
Share Ownership Plan
FY 2016
Issue Date
14 Oct 2015
Number of Options Issued 620,000
Expiry Date
14 Oct 2020
Expected Vesting Period
3 years
Exercise Price
$2.46
Vesting Conditions
7 Dec 2015
150,000
7 Dec 2030
3 years
$2.46
30 Mar 2016
50,000
30 Mar 2021
3 years
$3.98
I. Service
II. Market
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] Achieve share price hurdle of greater than 52% of exercise price for 20 consecutive days in the
period between 36 months from the issue date and expiry of options.
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to fund options exercised for
associated tax liabilities.
Options and Rights – Employees
Share Ownership Plan
Share Ownership Plan – MD
FY 2015
Issue Date
17 Oct 2014
Number of Options Issued 760,000
Expiry Date
17 Oct 2019
Expected Vesting Period
3 years
Exercise Price
$0.98
Vesting Conditions
4 Dec 2014
200,000
4 Dec 2019
3 years
$0.98
I. Service
II. Market
[I] Must be an employee from date of issue until options are exercised, unless considered a good
leaver (in which case must exercise within 30 days)
[II] Achieve share price hurdle in excess of 60%
of the exercise price for 20 consecutive days in
the period between 36 months from issue and
expiry of options.
[II] Achieve share price hurdle in excess of 60% of
the exercise price for 20 consecutive days in the
period between 36 months from issue and expiry
of options.
III. Performance
As determined by the Board in its sole discretion
Disposal Restrictions
Restriction on sale of shares for 12 months from exercise, except to discharge tax obligations in
relation to the issue.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 90
Summary of options and rights granted
The following table illustrates the number, weighted average exercise prices (WAEP) and weighted average share prices
(WASP) of, and movements in, share options issued during the year:
Summaries of options granted
2021
Number
WAEP
WASP
Outstanding at the beginning of the year
1,633,095
-
2020
Number
1,792,344
331,332
(49,397)
WAEP
WASP
-
$12.36
-
-
-
-
-
-
-
91,384
$14.29
-
(72,029)
(491,322)
-
1,161,128
426,876
$4.53
$21.34
(441,182)
$2.82
$11.91
-
-
-
-
-
-
-
1,633,097
535,711
-
-
-
-
-
-
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Summaries of rights granted
2021
Number
WAEP
WASP
Outstanding at the beginning of the year
864,936
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
OPTION PRICING MODEL
1,130,667
(23,481)
(63,886)
-
1,908,236
131,798
-
-
-
-
-
-
-
-
-
-
-
2020
Number
823,092
132,680
(15,303)
(75,533)
-
864,936
-
WAEP
WASP
-
-
-
-
-
-
-
-
-
-
-
The fair value of all equity-settled options issued in the year is estimated at the date of grant using the Hoadley’s
1 Hybrid ESO model (monte carlo simulation method).
The following table lists the inputs to the models used:
1. Share based payment plans issued during the year ended 30 June 2021.
Options & Rights
Dividend Yield (%)
Expected Volatility (%)
Risk-free Interest Rate (%)
Expected Life of Options (Months)
Average Share price at Measurement
Date ($)
Options & Rights – Employee
Special 5 Year LTI
0.34%
58.8%
0.35%
60
$20.83
0.34%
58.8%
0.35%
36
$20.83
Model used
Hoadleys/Black Scholes
Hoadleys/Black Scholes
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
91
2. Share based payment plans issued prior to 1 July 2020.
Dividend Yield (%)
Expected Volatility (%)
Risk-free Interest Rate (%)
Expected Life of Options
(Months)
Option Exercise Price ($)
Average Share Price at
Measurement Date ($)
Model Used
Dividend Yield (%)
Expected Volatility (%)
Risk-free Interest Rate (%)
Expected Life of Options
(Months)
Option Exercise Price ($)
Average Share Price at
Measurement Date ($)
Model Used
Dividend Yield (%)
Expected Volatility (%)
Risk-free Interest Rate (%)
Expected Life of Options
(Months)
Option Exercise Price ($)
Average Share Price at
Measurement Date ($)
Model Used
25 Nov
2019
SOP
25 Nov
2019
PRP
(Rights)
0.39
44
0.82
36
12.36
11.83
0.39
47
0.82
36
N/A
11.83
7 Sep
2018
SOP
0.54
41
2.17
36
12.04
12.44
7 Sep
2018
PRP
(Rights)
7 Sep
2018
SOP –
Paragem
7 Sep
2018 PRP
(Rights) –
Paragem
0.54
41
2.17
36
N/A
12.44
0.54
41
2.17
24
12.04
12.44
0.54
41
2.17
24
N/A
12.44
7 Sep
2018
SOP
0.54
41
2.17
24
11.73
12.44
7 Sep
2018
PRP
(Rights)
0.54
41
2.17
24
N/A
12.44
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
Hoadleys/
Black
Scholes
12 Dec 2018
SOP
– MD
12 Dec 2018
PRP (Rights)
– MD
12 Dec 2018
SOP
– CFO
12 Dec 2018
PRP (Rights)
– CFO
12 Dec 2018
PRP (Rights)
– Director
12 Dec 2018
PRP (Rights)
– Special LTI
0.54
45
2.12
36
12.04
12.97
0.54
45
2.12
36
N/A
12.97
0.54
45
2.12
36
13.44
12.97
0.54
45
2.12
36
N/A
12.97
0.54
45
2.12
36
N/A
12.97
0.54
45
2.12
36
N/A
12.97
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
11 Oct 2017
SOP
11 Oct 2017
PRP (Rights)
21 Aug 2017
SOP
21 Aug 2017
PRP (Rights)
11 Dec 2017
SOP
11 Dec 2017
PRP (Rights)
-
45
2.38
36
7.09
8.18
-
45
2.38
36
N/A
8.18
-
45
2.37
36
6.25
8.18
-
45
2.37
36
N/A
8.18
-
45
2.37
36
7.09
9.68
-
45
2.37
36
N/A
9.68
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
Hoadleys/
Black Scholes
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 92
Dividend Yield (%)
Expected Volatility (%)
Risk-free Interest Rate (%)
Expected Life of Options
(Months)
Option Exercise Price ($)
Average Share Price at
Measurement Date ($)
Model Used
17 Oct
2014
SOP
4 Dec
2014
SOP CEO
4 Dec
2014
SOP
Paragem
-
35
2.5
36
0.98
0.89
-
35
2.5
36
0.98
0.89
-
33
2.5
12-36
1.156
0.89
14 Oct
2015
SOP
7 Dec
2015
SOP CEO
30 Mar
2016
SOP
29 Nov
2016
SOP
29 Nov
2016
SOP
-
48
1.8
36
2.46
2.69
-
48
1.8
36
2.46
3.52
-
50
2.09
36
3.98
4.06
-
45
2.16
36
4.46
5.79
-
45
2.16
36
5.17
5.79
29 Nov
2016
PRP
(Rights)
-
45
2.16
36
N/A
5.79
Black
Scholes
Black
Scholes
Black
Scholes
Hoadleys Hoadleys Hoadleys Hoadleys/
Black
Scholes
Hoadleys Hoadleys/
Black
Scholes
23. SIGNIFICANT EVENTS AFTER THE REPORTING DATE
Subsequent to year end the Directors have determined a fully franked final dividend of 5.5 cents per share (a fully
franked 3.5 cents per share final dividend was declared in FY20)
Catherine Kovacs was appointed as a Non Executive Director to the Board on 19 July 2021.
The Group has advanced a $3.64m loan to HTFS Holdings Pty Ltd, who had in turn used it to subscribe for capital in
HTFS Holdings Nominees Pty Ltd, a wholly owned subsidiary of EQT Holdings Limited (ASX:EQT), which is the Trustee
for the HUB24 Super Fund (the Fund). The loan agreement is entered into on an arm’s length basis and on commercial
terms at an interest rate of 10% per annum. The capital received by the Trustee is reserved for the purpose of meeting
the Operational Risk Financial Requirement (ORFR) for the Fund in accordance with APRA Prudential Standard SPS114.
No other significant matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
24. EARNINGS PER SHARE
KEY ACCOUNTING POLICIES
Basic EPS is calculated by dividing the result attributable to members of the Group, adjusted for the after-tax effect of
preference dividends on preference shares classified as equity, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.
Diluted EPS is calculated by adjusting the basic earnings by the after-tax effect of dividends and interest associated with
dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted average number
of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the calculations of basic and diluted loss per share.
Diluted earnings per share includes 1,212,205 options and 1,918,797 rights issued for employees.
Earnings per share
Total comprehensive income
Profit/(Loss) after income tax attributable to the owners of HUB24 Ltd used in calculating basic and
diluted earnings per share
Consolidated
2021
$
2020
$
9,769,140
8,228,297
9,769,140
8,228,297
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 93
Consolidated
2021
Number
2020
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
65,865,008
62,666,196
Weighted average number of ordinary shares used in calculating diluted earnings per share
68,433,859
64,044,938
Basic earnings per share
Diluted earnings per share
Basic earnings per share – Continuing operations
Diluted earnings per share – Continuing operations
25. REMUNERATION OF AUDITORS
Consolidated
2021
Cents
14.83
14.28
2020
Cents
13.13
12.85
Consolidated
2021
Cents
13.58
13.07
2020
Cents
14.07
13.77
During the year the following fees were paid or payable for services provided by professional service firms:
Audit and review of financial statements provided by Deloitte Touche Tohmatsu
Other assurance services
Tax and other services
Total audit and other fees
26. RELATED PARTY DISCLOSURES
(A) SUBSIDIARIES
Consolidated
2021
$
531,000
203,000
258,000
992,000
2020
$
365,000
91,350
266,043
722,393
HUB24 subsidiaries are entities which it controls and consolidates as it is exposed to, or has rights to, variable returns
from the entity, and can affect those returns through its power over the entity.
When the Group ceases to control a subsidiary, any retained interest in the entity is remeasured to fair value, with any
resulting gain or loss recognised in the income statement.
Changes in the Group’s ownership interest in a subsidiary which do not result in a loss of control are accounted for as
transactions with equity holders in their capacity as equity holders.
In the Parent Entity’s financial statements, investments in subsidiaries are initially recorded at cost and are
subsequently held at the lower of cost and recoverable amount.
All transactions between Group entities are eliminated on consolidation.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 94
Operating Entities
HUB24 Custodial Services Limited (formerly ANZIEX Ltd)
HUB24 Share Ownership Trust
HUB24 Management Services Pty Ltd
HUB24 Administration Pty Ltd
HUB24 Services Pty Ltd
Firstfunds Ltd
HUBconnect Pty Ltd (formerly ConnectHUB Pty Ltd)
Marketsplus Australia Pty Ltd
Paragem Pty Ltd1
Agility Applications Pty Ltd
Xplore Wealth Pty Ltd2
Xplore Business Services Pty Ltd
Investment Administration Services Pty Ltd
Margaret Street FInancial Holdings Pty Ltd
Margaret Street Administration Services Pty Ltd
Margaret Street Promoter Services Pty Ltd
Margaret Street Attorney Services Pty Ltd
Aracon Superannuation Pty Ltd
DIY Master Pty Ltd
Non-operating Entities
HUB24 International Nominees Pty Ltd (formerly ANZIEX Nominees Ltd)
HUB24 Nominees Pty Ltd (formerly Kardinia Nominees Pty Ltd)
Investorfirst Securities Ltd
Researchfirst Pty Ltd
Captain Starlight Nominees Pty Ltd
Findlay & Co Stockbrokers Ltd
HTH Nominees Pty Ltd
Planner Holdings Limited
PHL Securities Pty Ltd
Margaret Street Nominees Pty Ltd
Xplore Equity Finance Pty Ltd
Equity Finance Pty Ltd
Margaret Street Attorney Services Pty Ltd
% Equity Interest
as at
30 June
2020
as at
30 June
2021
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
100
100
100
100
100
100
100
-
-
-
-
-
-
1 The sale of Paragem Pty Ltd to Easton Investments Ltd was completed on1 February 2021.
2 Formerly known as Xplore Wealth Limited, but was delisted upon completion of acquisition in March 2021.
(B) ASSOCIATES
Associates are entities in which the Group has significant influence, but not control, over the operating and financial policies.
The Group accounts for associates using the equity method. The investments are initially recognised at cost (except where
recognised at fair value due to a loss of control of a subsidiary), and increased (or decreased) each year by the Group’s share
of the associate’s profit or loss. Dividends received from the associate reduce the investment in associate.
The Group has a 31.5% in Easton Investments Limited. For more information, refer to Note 5.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 95
% Equity Interest
as at
30 June
2020
as at
30 June
2021
31.5
-
Consolidated
2021
$
2020
$
14,223,926
472,500
(177,799)
14,518,627
-
-
-
-
Easton Investments Limited (ASX: EAS)
Investment in Easton Reconciliation
Initial Investment in Easton
Add: Share of associate profits
Less: Dividend Received
Closing investment in Easton
(C) ULTIMATE PARENT
HUB24 Limited is the ultimate parent entity of the Group.
27. PARENT ENTITY FINANCIAL INFORMATION
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the parent entity are consistent with those of the Group except for investments in
subsidiaries which are accounted for at cost, less any impairment, in the parent entity.
SUMMARY FINANCIAL INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Statement of financial position
Total assets
Total liabilities
Net assets
CONTINGENT LIABILITIES
Consolidated
2021
$
2020
$
8,972,118
16,891,558
8,972,118
16,891,558
211,482,629
101,383,287
(29,819,132)
(25,142,638)
181,663,497
76,240,649
The parent entity did not have any contingent liabilities as at 30 June 2021 or 30 June 2020.
CAPITAL COMMITMENTS
The parent entity had no capital commitments as at 30 June 2021 or 30 June 2020.
DEFERRED TAX ASSET
In addition to its own current and deferred tax amounts, the parent entity also recognises current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits (if any) assumed from
controlled entities in the Group. Refer to Note 7 for further details.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 96
28. KEY MANAGEMENT PERSONNEL
KEY MANAGEMENT PERSONNEL COMPENSATION
Short term employment benefits
Post employment benefits
Share based payments
Consolidated
2021
$
2020
$
3,373,935
2,783,848
325,130
106,526
2,082,894
1,841,508
5,781,959
4,731,882
Key management personnel (KMP) are those who, directly or indirectly, have authority and responsibility for planning,
directing and controlling the activities of HUB24. The KMPs are outlined in the Remuneration Report on page 28.
29. FINANCIAL INSTRUMENTS
KEY ACCOUNTING POLICIES
Held to maturity investments
The Group’s principal financial instruments comprise cash, receivables, a debt facility and payables. For the year ended
30 June 2021, the Group did not utilise derivatives and has not traded in financial instruments including derivatives.
Interest rate risk
The Group is not materially exposed to movements in short-term variable interest rates on cash and cash equivalents
and borrowings. All other financial assets and liabilities are non-interest bearing. The Directors believe a 50 basis point
decrease is a reasonable sensitivity given current market conditions. A 50 basis point increase and a 50 basis point
decrease in interest rates would increase/decrease profit and loss in the consolidated entity and the company by:
Cash and cash equivalents at end of period
ORFR loan
Borrowings
Financial Instruments subject to interest rate risk at the end of period
Cash and cash equivalents at end of period
50 basis points increase in interest rate
50 basis points decrease in interest rate
Borrowings
50 basis points increase in interest rate
50 basis points decrease in interest rate
Net impact on profit after tax
Profit for the year
50 basis points increase in interest rate
50 basis points decrease in interest rate
Credit risk
Consolidated
2021
$
2020
$
63,461,183
33,809,323
7,550,000
(12,500,000)
-
-
58,511,183
33,809,323
63,461,183
33,809,323
317,306
169,047
(317,306)
(169,047)
(12,500,000)
(62,500)
62,500
-
-
-
9,769,140
8,228,297
10,023,946
8,397,344
9,514,334
8,059,250
The Group advanced a loan to HTFS Holdings Pty Ltd, who used the proceeds to subscribe for capital in HTFS Holdings
Nominees Pty Ltd, a wholly owned subsidiary of EQT Holdings Limited (ASX:EQT), which is the Trustee for the HUB24
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 97
Super Fund (the Fund). The loan agreement is entered into on an arm’s length basis and on commercial terms at an
interest rate of 10% per annum.
The capital received by the Trustee is reserved for the purpose of meeting the Operational Risk Financial Requirement
(ORFR) for the Fund in accordance with APRA Prudential Standard SPS114.
The credit risk on this facility is low due to the segregation of the cash for the ORFR.
Liquidity risk
The table below reflects contractually fixed amounts for settlement resulting from financial liabilities. Cash flows
are undiscounted. The remaining contractual maturities of the consolidated entity’s and parent entity’s financial
liabilities are:
Not later than one month
Later than 1 month not later than 3 months
Later than 3 months not later than 1 year
Later than 1 year
FINANCING ARRANGEMENTS AND CAPITAL MANAGEMENT
The Group had access to the following borrowing facilities during the reporting period:
Floating rate – Expiring within one year (bank overdraft facility)
Floating rate – 3 year term (loan facility)
Drawn at balance date
Consolidated
2021
$
2020
$
6,610,196
4,563,708
1,841,250
3,769,113
-
657,333
148,878
-
12,220,559
5,369,919
Consolidated
2021
$
2020
$
5,000,000
5,000,000
12,500,000
12,500,000
-
-
The $5 million bank overdraft facility may be drawn at any time, and may be cancelled by giving the bank 10 business
days notice. During the year ended and as at 30 June 2021, the overdraft facility was not drawn down. The bank loan
facilities are subject to annual review.
The Group incurs a line fee of 0.60% per annum to maintain the bank overdraft facility with a further rate of BBSY +
1.25% applied to any drawn balances.
The 3 year amortising ANZ bank loan facility was secured specifically for the strategic transactions. The loan has
been fully drawn down with principal repayments of $3.25m payable every calendar year. The first repayment is due
following the release of these financial statements. The bank loan facility may not be redrawn once it has been repaid.
The Group incurs a commitment fee of 0.40% per annum to maintain the loan facility with an interest rate of BBSY +
1.95% applied to any drawn balances and paid quarterly.
Both the overdraft and loan facility are guaranteed by HUB24 Limited and its operating subsidiaries: Agility Applications
Pty Ltd; HUB24 Management Services Pty Ltd; HUB24 Administration Pty Ltd; HUB24 Custodial Services Ltd; HUB24
Services Pty Ltd; HUBconnect Pty Ltd. The Group’s regulatory capital requirements have been ring-fenced from the
ANZ security arrangements.
Maturity analysis of financial assets and liabilities
The risk implied from the values shown in the table below is based on best estimates and reflect a balanced
view of cash inflows and outflows. Leasing obligations, trade payables and other financial liabilities mainly
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 98
originate from the financing of assets used in our ongoing operations such as office equipment, platform
development and investments in working capital e.g. receivables. These assets are considered in the Group’s
overall liquidity risk.
0–1 month
$
1–3 months
$
4–12
months
$
1–5 years
$
Total
$
30 June 2021
Consolidated financial assets:
Cash and cash equivalents
Trade and other receivables
Consolidated financial liabilities:
62,366,183
70,000
1,025,000
11,929,904
3,803,725
899,271
74,296,087
3,873,725
1,924,271
Trade and other payables
6,610,196
1,841,250
644,113
-
-
-
-
63,461,183
16,632,900
80,094,083
9,095,559
Borrowings
Net Maturity
30 June 2020
Consolidated financial assets:
Cash and cash equivalents
Trade and other receivables
Consolidated financial liabilities:
Trade and other payables
Net Maturity
-
-
3,125,000
9,375,000
12,500,000
6,610,196
1,841,250
3,769,113
9,375,000
21,595,559
67,685,891
2,032,475
(1,844,842)
(9,375,000)
58,498,524
28,668,004
5,141,319
9,076,626
804,173
37,744,630
5,945,492
4,563,708
4,563,708
657,333
657,333
33,180,922
5,288,159
-
165,282
165,282
148,878
148,878
16,404
-
-
-
-
-
-
33,809,323
10,046,081
43,855,404
5,369,919
5,369,919
38,485,485
The Group monitors rolling forecasts of liquidity reserves on the basis of expected cash flow and aims to maintain a
minimum equivalent of 90 days worth of operational expenses in cash reserves.
MARKET RISK
The Group balance sheet is not materially exposed to movements in market prices.
The net fair value of financial assets and liabilities approximates their carrying values and the methods for estimating
fair values are outlined in the relevant notes to the financial statements.
FAIR VALUE MEASUREMENT
No other financial instruments for the year ended 30 June 2021 required fair value assessment (FY20: nil).
30. BUSINESS COMBINATION
ORD MINNETT’S PORTFOLIO ADMINISTRATION AND REPORTING SERVICE (PARS)
On 28 November 2020 HUB24 Limited completed the acquisition of Ord Minnett’s Portfolio Administration and
Reporting Service (PARS).
PARS is a non-custody portfolio service that has been operating within Ord Minnett for 15 years and includes tax
reporting and corporate action management
The transaction, which includes the acquisition of an experienced team of 12 employees, software and related
intellectual property, was completed for an upfront cash consideration of $10.5 million.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 Purchase consideration
Cash paid – at completion
Royalty consideration
Total purchase consideration
The fair values of the acquisition are as follows:
Administration agreement
Assumed other employee entitlements
Net identifiable assets acquired
Net assets acquired
REVENUE AND PROFIT CONTRIBUTION
99
Total
$
10,500,000
47,698
10,547,698
Fair value
$
10,761,331
(213,633)
10,547,698
10,547,698
The acquired business contributed revenue of $1.8 million and expenses of $1.4 million to the Group for the period
from 1 December 2020 to 30 June 2021. It’s impracticable to provide this information for the full period ending 30 June
2021 as it is not readily available. These contributions have been recognised in the Platform segment for the purposes
of this annual financial statement.
XPLORE WEALTH LIMITED
On 2 March 2021 HUB24 Limited completed the acquisition of Xplore.
Xplore brings highly complementary expertise and scale to HUB24 for both high-net worth customers as well as
portfolio administration and reporting services.
The transaction, which includes the acquisition of an experienced team of 81 employees, software and related
intellectual property, was completed for an upfront cash consideration of $29.8 million and issuance of 1.4 million
ordinary shares to Xplore shareholders, and an upfront cash consideration of $0.4 million to Xplore Option holders.
A purchase price allocation assessment is expected to be undertaken during FY22 to determine fair value of the assets
required.
Purchase consideration
Cash paid – at completion
Cash settlement for Xplore options
HUB24 shares issued (scrip issue)
Total purchase consideration
The provisional fair values of the acquisition are as follows:
Cash balances acquired
Non cash assets acquired
Assumed liabilities
Net identifiable assets acquired
Add: Acquisition intangibles
Net assets acquired
Total
$
29,763,993
412,251
29,753,296
59,929,540
Fair value
$
3,170,287
38,517,358
(5,910,465)
35,777,180
24,152,359
59,929,539
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 100
The acquired business contributed revenue of $8 million and net profit after tax of $0.6 million to the Group for
the period consolidated 2 March 2021 to 30 June 2021. The full year revenue for Xplore was $24 million. Net profit
after tax for the full year is not provided as the changes in the cost base since acquisition make it impracticable to
determine. All contributions to the Group for the period from 2 March 2021 to 30 June 2021 have been recognised in
the Platform segment.
31. DISCONTINUED OPERATIONS
Statement of profit or loss
Revenue
Expenses
Loss before income tax from discontinued operations
Income tax benefit
Consolidated
2021
$
2020
$
17,568,810
29,550,189
(18,135,072)
(30,140,131)
(566,262)
(589,942)
157,829
176,984
On 28 October 2020 the Group announced its intention to sell the subsidiary, Paragem Pty Limited (“Paragem”), to
Easton Investments Limited (“Easton”). A binding heads of agreement was signed on 20 December 2020 stating that
the sale would be undertaken through a share sale agreement whereby Easton would issue approximately 3.3 million
shares to HUB24 Limited in consideration for the transfer of all shares in Paragem.
The sale of Paragem completed on 1 February 2021 and included a capital return of $3.2 million.
An accounting gain of $1.4m is recorded in the financial accounts to 30 June 2021. The profit before income tax from
discontinued operations is $0.8m.
32. PROFIT RESERVES
To the extent possible under the Corporations Act 2001 and applicable tax laws, the profits reserve is preserved for
future dividend payments.
Profit reserve
Opening balance
Transfer to profit reserves
Dividends provided for or paid
Closing balance
Consolidated
2021
$
2020
$
45,341,770
40,847,253
40,847,253
13,014,445
9,769,140
31,659,750
(5,274,623)
(3,826,942)
45,341,770
40,847,253
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 101
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2021
IN THE DIRECTORS’ OPINION:
c. there are reasonable grounds to believe that the
Group will be able to pay its debts as and when they
become due and payable, and
a. the financial statements and notes set out on pages
d. this declaration has been made after receiving the
48 to 100 are in accordance with the Corporations Act
2001, including:
i. giving a true and fair view of the Group’s financial
position as at 30 June 2021 and of its performance
for the financial year ended on that date, and
ii. complying with Australian Accounting
Standards (including the Australian Accounting
Interpretations), the Corporations Regulations
2001 and other mandatory professional reporting
requirements, and
b. the financial statements and notes comply with
International Financial Reporting Standards as
disclosed in Note 2, and
declarations by the Chief Executive Officer and Chief
Financial Officer required by section 295A of the
Corporations Act 2001.
Signed in accordance with a resolution of Directors.
Bruce Higgins
Chairman
Sydney
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 102
INDEPENDENT AUDITOR’S REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Deloitte Touche Tohmatsu
Sydney, NSW, 2000
ABN 74 490 121 060
Australia
Grosvenor Place
225 George Street
Phone: +61 2 9322 7000
Sydney, NSW, 2000
www.deloitte.com.au
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Independent Auditor’s Report to the Members of HUB24
Limited
Independent Auditor’s Report to the Members of HUB24
Limited
Report on the Audit of the Financial Report
Phone: +61 2 9322 7000
www.deloitte.com.au
performance for the year then ended; and
performance for the year then ended; and
Opinion
Report on the Audit of the Financial Report
We have audited the financial report of HUB24 Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the
Opinion
Independent Auditor’s Report to the Members of HUB24
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
We have audited the financial report of HUB24 Limited (the “Company”) and its subsidiaries (the
Limited
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the
to the financial statements, including a summary of significant accounting policies, and the directors’
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
declaration.
Report on the Audit of the Financial Report
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
to the financial statements, including a summary of significant accounting policies, and the directors’
Opinion
Act 2001, including:
declaration.
We have audited the financial report of HUB24 Limited (the “Company”) and its subsidiaries (the
• giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the
Act 2001, including:
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
• giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
• complying with Australian Accounting Standards and the Corporations Regulations 2001.
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the directors’
declaration.
• complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Act 2001, including:
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Basis for Opinion
• giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
Report section of our report. We are independent of the Group in accordance with the auditor
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
independence requirements of the Corporations Act 2001 and the ethical requirements of the
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
• complying with Australian Accounting Standards and the Corporations Regulations 2001.
Report section of our report. We are independent of the Group in accordance with the auditor
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
the Code.
Basis for Opinion
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
We confirm that the independence declaration required by the Corporations Act 2001, which has been
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
given to the directors of the Company, would be in the same terms if given to the directors as at the
the Code.
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
time of this auditor’s report.
Report section of our report. We are independent of the Group in accordance with the auditor
We confirm that the independence declaration required by the Corporations Act 2001, which has been
independence requirements of the Corporations Act 2001 and the ethical requirements of the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
given to the directors of the Company, would be in the same terms if given to the directors as at the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
for our opinion.
time of this auditor’s report.
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
for our opinion.
the Code.
performance for the year then ended; and
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
Liability limited by a scheme approved under Professional Standards Legislation.
time of this auditor’s report.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Liability limited by a scheme approved under Professional Standards Legislation.
for our opinion.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
103
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter
How the scope of our audit responded to the Key Audit
Matter
Intangible Assets
Our procedures included, but were not limited to:
As at 30 June 2021 the carrying value
of intangible assets includes the
following as disclosed in Note 11:
$m
37.4
63.8
0.3
Investment platform
Goodwill
Agility customer
relationships
Agility CONNECT
software
Other
Total
0.6
1.9
104.0
• obtaining an understanding of the key controls
associated with the preparation of the value-in-use
models;
• evaluating management’s methodologies and their
documented basis for key assumptions;
• in conjunction with our valuation specialists, we
assessed and challenged the following:
o
reasonableness of long-term growth rates used
in the forecast cash flows by comparing them to
historical results, economic and industry
forecasts; and
o discount rate applied.
• testing the mathematical accuracy and integrity of
Evaluation of the recoverable amount
of intangible assets requires
significant judgement due to the
estimation of future cash flows,
discount and terminal growth rates,
and the period over which cash flows
have been discounted.
Acquisitions and Divestments
During the year ended 30 June 2021,
HUB24 undertook the following
strategic transactions:
• acquisition of investment platform
provider Xplore Wealth Limited
(Xplore) by way of a scheme of
arrangement for $50.9 million
through combination of cash
consideration and HUB24 shares
issued as disclosed in Note 30;
the value-in-use models;
• assessing the accuracy of managements’ forecast
cash flow models and Board approved budget;
• performing sensitivity analysis on the key drivers of
growth rates used in the cash flow forecasts and the
discount rate applied; and
• assessing managements’ consideration of the
sensitivity to a change in key assumptions that both
individually or collectively would be required for
assets to be impaired and considered the likelihood of
such a movement in those key assumptions.
We also assessed the appropriateness of the disclosures
in the Notes to the financial statements.
Our procedures included, but were not limited to:
• obtaining an understanding of key processes within
the acquired businesses;
• testing the design, implementation and operating
effectiveness of relevant controls in place over key
processes – and evaluating effectiveness of controls
during the acquisition period;
• obtaining an understanding over the consolidation
and equity accounting process;
• evaluating management’s position paper outlining
their methodologies and assumptions used to assess
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
104
How the scope of our audit responded to the Key Audit
Matter
the accounting impact of each of the transactions;
and
• assessing and challenging the reasonableness of
assumptions and judgements used by management,
or management’s expert, in conjunction with our
financial reporting, corporate finance, and tax
specialists, to determine the recognition and
measurement of identifiable assets acquired
(including non-controlling interest in the acquiree) in
accordance with AASB 3 Business Combinations.
We also assessed the appropriateness of disclosures in
the Notes to the financial statements.
Key Audit Matter
• acquisition of Ord Minnett’s non-
custody Portfolio Administration
and Reporting Service (PARS) for
$10.5 million cash consideration as
disclosed in Note 30;
• acquisition of 1 out of every 3
shares in Easton Investment
Limited (Easton) for $10.2 million
cash consideration as disclosed in
Note 26; and
• divestment of HUB24 subsidiary
Paragem Pty Limited to Easton for
$4 million of Easton Shares as
disclosed in Note 20.
There is significant judgement and
complexity in relation to:
• determining whether the
transactions meet the definition of
an asset acquisition or a business
combination;
• integration of financial reporting
lines, equity accounting, and
consolidation of new subsidiaries;
• determining the purchase price
allocation and calculation of
goodwill;
• initial recognition of deferred tax
balances associated with the
acquisitions; and
• removal of Paragem from the
group, and recognition and
measurement of a gain/loss.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2021, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard. Our opinion
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
105
on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021
106
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group's audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 28 to 45 of the Directors’ Report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of HUB24 Limited, for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Stuart Alexander Partner
Chartered Accountants
Sydney, 23 August 2021
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 107
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report
is as follows. This information is current as at 30 June 2021.
DISTRIBUTION OF EQUITY SECURITIES
Ordinary share capital – 68,333,179 fully paid ordinary shares are held by 5,148 individual security holders.
All issued ordinary shares carry one vote per share without restriction and carry the rights to dividends. The number of
security holders, by size of holding, in each class are:
Fully paid ordinary shares – holding ranges
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
OPTIONS
Holders
Total units
%
3,181
1,543
223
170
1,115,747
3,565,502
1,569,701
4,836,523
1.63
5.22
2.30
7.08
31
57,245,706
5,148
68,333,179
83.77
100.00
1,154,379 options and 2,052,086 performance rights are held. Options and performance rights do not carry a right to vote.
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 108
SUBSTANTIAL SHAREHOLDERS – QUOTED ORDINARY SECURITIES
Citicorp Nominees Pty Ltd
HSBC Cutody Nominees (Australia) Ltd
J P Morgan Nominees Australia Pty Ltd
UBS Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
National Nominees Ltd
BNP Paribas Nominees Pty Ltd
Pacific Custodians Pty Ltd
Mrs jasmin Zheng-Min Zhao Litster
BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd
Mr Ian James Litster
Mr Jason Matthew Entwistle
Litster & Associates Pty Ltd
Mr Bruce Higgins & Mrs Ruth Higgins
Netwealth Investments Ltd
Skylyx Pty Ltd
Jasforce Pty Ltd
Citicorp Nominees Pty Ltd
Mirrabooka Investments Ltd
Craig Apps & Michelle Apps
Total
Number held
13,372,595
10,946,327
8,371,051
4,935,765
3,672,981
3,385,660
2,836,075
1,572,069
1,188,545
827,451
678,994
580,052
578,388
510,000
370,433
360,392
329,845
308,826
304,000
238,376
%IC
19.57%
16.02%
12.25%
7.22%
5.38%
4.95%
4.15%
2.30%
1.74%
1.21%
0.99%
0.85%
0.85%
0.75%
0.54%
0.53%
0.48%
0.45%
0.44%
0.35%
55,367,825
81.02%
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 109
CORPORATE DIRECTORY
DIRECTORS
Mr Bruce Higgins (Chairman)
Mr Andrew Alcock (Managing Director)
Mr Ian Litster (resigned 5 March 2021)
Mr Anthony McDonald
Mr Paul Rogan
Ms Ruth Stringer
Ms Catherine Kovacs (appointed 19 July 2021)
SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
SECRETARIES
Mr Paul Howard (resigned 18 December 2020)
Ms Debbie Last (resigned 6 September 2020)
Ms Kitrina Shanahan (appointed 7 September 2020)
Mr Andrew Brown (appointed 30 April 2021)
PRINCIPAL REGISTERED OFFICE IN AUSTRALIA
Level 2
7 Macquarie Place
Sydney NSW 2000
Australia
ABN 87 124 891 685
STOCK EXCHANGE LISTINGS
HUB24 Limited shares are listed on
the Australian Securities Exchange
(ASX Code: HUB)
AUDITOR
Deloitte Touche Tohmatsu
Grosvenor Place
225 George Street
Sydney NSW 2000
WEBSITE
hub24.com.au
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021 110
NOTES
HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2021