OneVue Holdings Ltd (ASX:OVH) has undertaken major restructuring initiatives in recent months, resulting in some share price underperformance.
However, the March quarter update provided on Tuesday points to a much cleaner business focused on its core competencies across the financial services sector.
The company has three divisions - fund services, platform services and trustee service.
Analysts highlight new opportunities
The restructure has resonated with analysts.
Bell Potter’s Lafitani Sotiriou said: “The restructuring activity sets up OneVue to pursue the significant opportunity before it in its core areas of fund services, super administration, platform services and superannuation trustee services.
“We see the company as a key beneficiary of this move to independence, but more broadly, from the large players looking to exit wealth businesses as many of them may look to outsource the administration to OneVue.”
Strong growth in core business
Based on financial metrics released in the March quarter update, the company’s core business is looking healthy.
Funds under trusteeship at March 31, 2018, grew $193 million during the three-month period to $10.5 billion, driven by growth assets of existing and new clients.
Year-on-year growth was 11.6%, representing a material increase of $1.1 billion in funds under trusteeship.
Price target implies substantial upside
While the sale of assets prompted some minor downgrades to earnings per share, Sotiriou maintained a buy recommendation with a share price target of $1.19.
This implies upside of 63% to Tuesday’s close of 73 cents.