INVESTSMART GROUP LIMITED — Capital/Financing Update 2016

Mar 22, 2016

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23 March 2016

Attention: Company Announcements ASX Limited

By E-Lodgment

AWI takes a leading position in Australia’s fintech sector

After 12 months of centralising operations of AWI’s three brands, InvestSMART, Intelligent Investor, and Your Share, AWI is now a profitable player in the rapidly growing fintech sector, offering the tools, research, and services investors need to take control of their financial future.

It is with this scalable strong foundation that AWI is pleased to announce it has entered into a binding agreement to acquire 100% of Eureka Report Pty Ltd (Eureka Report) from News Corp Australia, expanding its content, research, and distribution capabilities.

The transaction, funded from cash reserves, is expected to be earnings accretive in FY2017.

Eureka Report and Intelligent Investor will retain their editorial and analytical teams, preserving the integrity of each brand and the reliability of the advice offered. Maintaining this independence will be critical to leveraging revenue growth through powerful cross-selling and research bundling opportunities.

Key highlights of the acquisition include:

Revenue to increase by 28%

Earnings accretive in FY2017

Paying members to increase by 30% to over 35,000

Registered users will double to over 700,000 unique Australian investors

Powerful synergies for cross-promoting different product and services across the Eureka Report, Intelligent Investor and InvestSMART members, expected to accelerate growth in revenue over the short and medium term.

Mr Paul Clitheroe, Chairman of AWI, said: “ This is an exciting acquisition. Eureka Report produces unique and compelling content that’s highly complementary to our existing InvestSMART and Intelligent Investor members. It cements our place as a leader in the dynamic fintech space. ”

CEO and MD Ron Hodge said: “ The purchase of Eureka Report means we can deliver high-value services such as quality research, stock recommendations, investment planning, online portfolio management, and self-managed accounts to hundreds of thousands of people that are taking control of their investments but need expert support to help them do that successfully. Interestingly, there is also little overlap between Eureka members and our existing users.

InvestSMART’s digital platform helps nearly 60,000 Australians invest, manage, and monitor over $4 billion in direct equities, $1.3 billion in managed funds, and $0.8 billion in cash. We look forward to introducing our new Eureka Report members to the benefits of our platform.”

Organic growth and the Eureka Report acquisition confirms AWI’s place as a fintech leader. With a rapidly growing audience of over 35,000 paying members and 700,000 registered users, AWI delivers an extensive and growing range of innovative services including online investment decision-making tools, ETF investments, and stock recommendations critical to helping all Australians reach their investment and retirement goals.

ENDS