Magellan’s main operating subsidiary, Magellan Asset Management Limited, manages over $80 billion of funds under management as at 30th April 2019 across its global equities, global listed infrastructure and Australian equities strategies for retail, high net worth and institutional investors and employs a more than 120 personnel.
Stock Performance – The Group has a market capitalisation of around $10.09 billion, with approximately 177.09 million shares outstanding.
Today, on 17th July 2019, the MFG stock settled the day’s trading at $59.450, climbing up 3.212% by $1.850, with the stock price touching a new 52-week high of $59.740 midday. Around 887,256 shares were traded in total. In addition, MFG has delivered impressive positive return yields of 143.73% YTD, 113.81% for the last six months, and 17.08% for the last one month.
Reaching a 52-week high in the stock price is considered as a significant milestone for the company and monitoring the same gives savvy investors an insight into where the stock is now versus where it has been in the recent past, reflecting a range of how far that particular stock’s price has moved within the past one year.
Recently, Magellan Financial Group became a substantial shareholder in Atlas Arteria and Spark Infrastructure Group upon purchase of ordinary shares in both entities, translating into a voting power of 6.02% (41,155,884) and 5.06% (85,099,706 shares), respectively.
CEO Employment Agreement Changes – Magellan Financial Group announced on 15th July 2019 that an amendment has been agreed for the terms of the Executive Employment Agreement between MFG, Magellan Asset Management Limited and Dr Brett Cairns, Chief Executive Officer. The amended Agreement concerns changes in the fixed remuneration, variable remuneration, SPP participation and review. It was executed by the parties on 15th July 2019 and would be considered effective from 1st July 2019 onwards.
Funds Under Management (FUMs) Update – On 5th July 2019, the Group disclosed its funds under management for the month of June 2019. During the concerned period, Magellan Financial Group reported net inflows valued at around $488 million, which comprised $356 million of net institutional inflows and $132 million of net retail inflows.
The total FUMs for the month stood at $86,718 million ($82,759 million as at 31st May 2019), including $23,216 million under retail FUMs and $63,502 million under institutional FUMs. A snapshot of the same is given below.
Reportedly, Magellan also declared to pay distributions of approximately $604 million (net of reinvestment) in July 2019, which would be included and in the next month’s FUM figures disclosure.
In addition, Magellan Financial Group also added that it is entitled to an estimated performance fees of approximately $83 million (including performance fees of $42.699 million disclosed in the Interim Financial Report as at 31st December 2018) for the year ended 30th June 2019. According to the Group, the performance fees (if any) has a tendency to fluctuate significantly from period-to-period.
Also, for the 12 months to 30th June 2018, the average FUMs were valued at around $75.8 billion, reflecting a rise over $59.0 billion reported for the 12 months ended 30th June 2018.
Leadership Changes – Magellan Financial Group announced, on 4th June 2019, the appointment of Mr Hamish McLennan as a Deputy Chairman of Magellan, and Mr Robert Fraser as a Non-Executive Chairman of Magellan Asset Management Limited, Responsible Entity and main operating subsidiary of Magellan, effective 5th June 2019.
Chairman, Mr Hamish Douglass quoted that the Group was delighted to have such a dedicated and experienced Board. While Mr Fraser is presently Chairman of the Audit and Risk Committee and has a robust understanding of Magellan’s operations, Mr McLennan also holds extensive experience of working in both executive capacity and as a Chairman of the public companies.
Earlier in March 2019, the Group appointed Ms Marcia Venegas to the role of Company Secretary, effective immediately, following the resignation of former Company Secretary, Mr Geoffrey Stirton.
Unit Purchase Plan Update – On 8th March 2019, Magellan Asset Management Limited in its capacity as the responsible entity of the Magellan Global Trust (ASX: MGG), advised that the Unit Purchase Plan offer had closed on 6th March 2019 upon receipt of Applications from over 21,000 unitholders, totalling ~$277 million. As per the terms and conditions of the Offer, the offer price for New Units was around $1.5327 each and approximately 181 million New Units were issued on 13th March 2019.
In addition, Magellan Financial Group, the parent entity, also stated to pay approximately $14.6 million to MGG, equal to the 5% discount to the NAV per unit from which the offer price under the Offer was determined to minimise dilution from the Offer.
This cost was indicated to be included in MFG’s 2019 financial year expenses and was additional to MFG‘s estimated total 2019 expenses of ~$105 million.
Half-Year Results 2019 Highlights – The group released its half-yearly results for the six months to 31st December 2018, wherein it has posted that the average funds under management increased by 35% to $72.1 billion, which consequently drove a 28% increase in the management and services fees to $228.1 million.
There was a staggering rise of 225% in the statutory net profit after tax to $173.5 million, which reflected a growth both businesses and importantly, the low comparable number from last year, where the one-off costs, which were spent setting up the Magellan Global Trust were expensed. Besides, the adjusted group profit after tax grew by 62% to $176.3 million.
The Group recorded a strong performance from its global equity and infrastructure strategies in volatile markets.
The effective tax rate for the six months stood at 22.6% (Offshore Banking Unit).
The total net inflows for the six months ended 31st December 2018 amounted to $1.4 billion.
The Group’s dividend policy pays out Interim and Final dividends based on 90% to 95% profit of funds management segment and Annual Performance Fee Dividend based on 90% to 95% of net crystallised performance fees after tax. In line with that, an interim dividend of 73.8 cents per share (75% franked) was paid out to the shareholders, reflecting an increase of 66% on the prior corresponding period.
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