Praemium to spend $10 million conquering the UK

Praemium intends to use $10 million of the $18 million it hopes to raise in its initial public offering to fund its expansion plans in the UK. According to the Praemium prospectus, the portfolio administration provider has made presentations to over 50 UK firms and has received expressions of interest from a number of them.

Praemium is scheduled to list on the ASX on May 24 and is offering 34.74 per cent of the company in the IPO for $18 million at 40c per share, which values the group at almost $52 million. The prospectus notes that Praemium lost just over $1.2 million in both the 2004 and 2005 tax years. However, its revenue in the six months to December 2005 totaled $1.091 million compared to $1.37 million in the 12 months to June 2005. Praemium has two strands to its business – a flat fee portfolio administration service and its separately managed account (SMA) venture with Merrill Lynch Investment Management. The deal with Merrill is an exclusive arrangement until November 8, 2008 or until the SMA reaches $2.3 billion. Praemium has signed up dealer group Tolhurst Noall to use the SMA and has received letters of intent from several others, its prospectus says. As well as using the $10 million to establish its UK business Praemium has budgeted $2 million to open offices in Sydney, Brisbane and Perth. Arthur Naoumidis, Praemium founder and MD, said while the business had been operating for less than four years the value of administered investments has tripled in the past 16 months. “;Today there are more than 220 financial services organisations using PAS [portfolio adminstration system] to administer some $10.4 billion of assets across more than 13,000 investment portfolios and our clients include some of Australia’s largest financial service providers”; Naoumidis said in a statement.