‘Challenging conditions’ impact Perpetual profits

Perpetual’s net profit after tax (NPAT) was down 14% on 1H19 to $51.6 million due to net outflows, lower performance fees and investment in strategic growth initiatives as the company delivered results for the six months to December, 2019.

Following this, the company reported a fully franked interim dividend of 105 cents per share which represented a payout ratio of 95%, the firm said in the announcement made to the Australian Securities Exchange (ASX).

Commenting on the half-year results, Perpetual’s chief executive and managing director, Rob Adams said that regulatory, macro and geopolitical factors continued to disrupt the financial services industry over that time period and had had a serious impact on the asset management and advice sectors.

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As a result, Perpetual’s Investment profit before tax (PBT), which amounted to $37.2 million and represented a 20% fall compared to the first six months of FY19, reflected a decrease in revenue due to lower average funds under management (FUM) and lower performance fees earned.

“While the business experienced challenging conditions with elevated markets offset by net outflows, it was pleasing to report positive inflows during the second quarter, with cash and fixed income now representing more than one third of our total FUM,” Adams said.

Also, Perpetual’s Private’s PBT fell by 23% to $17.4 million as a result of increased investment in strategic initiatives which included acquisition expenses related to Priority Life and additional staff costs.

At the same time, the business continued to grow its adviser numbers which stood at 72 as of the end of December while a ‘pipeline of new advisers continues to build’, it said.

 

 




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