Magellan (ASX:MFG) reports 3% fall in FY22 profit; shares in red

Image Source: © Timonschneider | Megapixl.com

Highlights:

  • Magellan’s adjusted net profit after tax, for FY22, has fallen from AU$412.4 million to AU$399.7 million, drop of 3%.
  • Company’s average funds under management dropped 9% to AU$94.3 million from 103.7 million in FY2021.
  • Magellan has announced a dividend of 68.9 cents per share, payable on 6 September 2022.

Australian fund manager, Magellan Financial Group Limited (ASX:MFG), on Wednesday (17 August 2022), shared its full-year results for the financial year 2022 (FY22).

The ASX-listed diversified financial company has not delivered a strong set of numbers in FY22 and has reduced the year's dividend. In line with this, the share price of Magellan buzzed in the red territory during the early trading hours. At 10:35 AM AEST, the shares were spotted trading 5.80% lower at AU$14.13 per share.

Highlights of the FY22 results

  • During the year, the statutory net profit after tax reached AU$383.0 million, up by 44%.
  • Adjusted net profit after tax is down by 3% to AU$399.7 million in a year.
  • Average funds under management declined by 9% to AU$94.3 billion.
  • Adjusted diluted earnings per share dropped to AU$215.9 cents per share, a fall of 4%.
  • At the end of the reporting period, the total FUM stood at AU$61.3 billion.
  • The company ended the year with cash, investment in associates and financial assets of AU$963.3 million, up 7% compared to the previous year.

Image source: © Carloscastilla | Megapixl.com

Magellan dividend history

Magellan has reduced its final dividend from 211.2 cents per share in FY21 to 179.0 cents per share in FY22, a fall of 15%. For the six months ending on 30 June 20221, the company has announced a dividend of 68.9 cents per share. The record date is 23 August 2022, and the payment date is 6 September 2022. 80% of the dividend is franked, and the dividend reinvestment plan is also active.

Capital management by Magellan

Magellan is committed to active capital management, and as a part of it, the company conducted an on-market buy-back in FY22 of up to 10 million shares. As of 30 June 2022, the group had bought back 629,960 shares for AU$12.43 average price.

During the year, Magellan issued bonus options on a 1-for-8 basis at an exercise price of AU$35.00 for zero consideration. The bonus options have expiry in April 2027.

Magellan Capital Partners had sold 11.6% interest in Guzman y Gomez Limited for AU$140 million cash, a 36.3% premium on the price purchased. The company has no intention to further invest through Magellan Capital Partners.

Road ahead!

The company will remain focused on its funds under management business. The company is expected to grow under the leadership of a new managing director and CEO – David George.

David George said that the material client outflows witnessed during the second half of FY22 would affect FY23.


 


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