Cashwerkz (ASX:CWZ) FY19 results & outlook


by Jessica Amir

Cashwerkz Limited (ASX:CWZ) Director, John Nantes talks FY19 results and outlook, including growth in distribution through adviser platforms, neo-banks and new functionality.

Jessica Amir:
Thanks for tuning into the Finance News Network. I'm Jessica Amir. Joining us right now from Cashwerkz (ASX:CWZ) is Director John Nantes. Hi John and welcome back, and thanks for your company while you're in Melbourne.

John Nantes: Thank you. Thanks for having me.

Jessica Amir: So Cashwerkz is an online platform that solves the big problem of shopping around for the most competitive cash and term deposit rates. So tell us where growth is coming from.

John Nantes: This year we've seen growth come from all our segments, so our advisor channel, retail direct, custodians, brokers and institutional and fund managers as well. So it's a complete spread across our universe of who we do business with. And for us in our first year, it's a pretty exciting outcome to see so many different areas contributing to the platform as we go into year two and look to scale up and grow.

Jessica Amir: And now to your financial results, your FY19 results, take us through the key highlights.

John Nantes: We're very proud of our first-year results in that we achieve revenue uplift around the 38 per cent or 60 per cent when you normalise it on a year on year basis. We're very proud of the fact that we put about $2.3 billion in flow through the platform and as at June 30 had about $1 billion active on the platform as well. We grew out to 43 ADIs or banks, meaning we really have built a unique cash marketplace in this country for everybody to participate in, bringing the banks and their cash and TD rates extremely close to investors, advisors, fund managers, councils, you name it, anyone who's got money that needs to invest in a cash TD basis. We're brought that whole universe together in a way that's extremely transparent and efficient and as you say, offering those market leading rates and making a difference.

Jessica Amir: And well done on the revenue growth and achieving that $1 billion milestone. You've also had some important partners join the network. Just tell us more, starting off with Praemium (ASX:PPS).

John Nantes: One of the key segments for us is the platform space where, in Australia at the moment, there's about $850 billion sitting on platforms. So winning Praemium and being able to do work with them is our first big, big announcement, and what that's allowing us to do is work within their technology and their infrastructure to bring a plethora of ADIs and banks to the platform for their investors to make better choices and get better rates. For us, it's exciting in that proves up that our technology can interplay with the platform space, as we now look to to grow that out and look for more partners where they're able to offer their clients more choice, and better rates across that cash and TD landscape.

Jessica Amir: And what about Agility Connect?

John Nantes: Look, Agility is a game changer for us. We wanted to change the way we did business in terms of offering our technology into other already existing technology providers in the financial services space. So Agility already provides CRM and broader technology capability to 175 brokers and advisors and dealer groups. So what we've done there, is rather than ask the same brokers and dealer groups to come to our platform, we're integrating into the Agility platform, giving them already readymade access to the platform and its ability to use. So the way we're now thinking about our technology and how we partner is firstly you can come to us, but secondly, if not, we'll come to you and play in the exact space that you're already playing in with your technology, and how you're using that to solve your clients cash and term deposit needs.

Jessica Amir: And Judo Bank?

John Nantes: So Judo Bank are a fantastic example where we're partnered with them to help them raise capital on their balance sheet, and we think that as they grow out, we'll be a big part of helping all the neobanks play in the space. What I'll say too though, is the traditional banks, all credit to them, they are sprinting to enable technology for their customers to also grow their capital needs, and solve for their funding needs. So while the neobanks are doing a fantastic job creating a new landscape, I think the traditional banks are spending a lot of time and effort making sure they're getting to the front of the pack as well.

Jessica Amir: Thanks John. And most advisors offer a cash management account or a cash management trust or CMT. How does your offering work alongside the existing default option?

John Nantes: One of the things about Cashwerkz is that we now offer greater transparency for the broker and adviser market. Meaning they're not limited to a narrow solution set. With Cashwerkz, they have greater choice to manage their client's cash and then put it in play in terms of other assets as they manage that total portfolio. Meaning they can actually better act in their client's best interests in solving for their cash and term deposit needs.

Jessica Amir: And John, can you tell us about innovation and how this is growing company in-flows?

John Nantes: Because we're adapting our technology to integrate with current financial services providers, we're doing a lot of work on how we can actually make that more efficient. Agility is a good example of that, but we're looking to do that more and more where we can redesign what we do to integrate within our current adviser, broker, or anyone who's advising clients space. We're also preparing our technology for open banking because we think that's going to fundamentally change the way customers interact with banks and financial services. And lastly, we're looking to increase the products and mix on our platform, so that our investors have more choice and more selection up the yield curve, which is very, very important in the current environment as yields are dropping.

Jessica Amir: And just lastly, John, before we let you go, is there anything else that you wanted to share today or tell investors?

John Nantes: One of the things that we've done in our announcement is proved up our concept. We're a very unique business with 43 ADIs, our own KYC AML solution that all the banks embrace. And to get through our first year and our proof of concept has been very exciting. Our next stage now is to scale and grow. And to do that through partnering across the retail landscape, the advised landscape and the wholesale areas. So we're going to see a lot of partnering as our pipeline grows in a lot of conversion. And a continual pursuit of increasing our technology capability.

Jessica Amir: Well. John Nantes, thank you so much for the update.

John Nantes: Great. Thank you. Thanks for having me.


Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.