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Perpetual Limited (ASX:PPT), a company from the financial sector acting as a Trustees, executors, investment managers and providing funds management, investment administration, custody and registry services, has announced its half-yearly results for the period ended 31 December 2018.
During the period, the company made a net profit after tax worth $60.2 million which decreased by 12% as compared to the 1H FY2018 as a result of lower performance fees, net outflows, and change in accounting treatment of unrealized gains and losses. The companyâs revenue was also down by 5% to $252.3 million. As a result, there was a fall in the interim dividend declared by the company by 7% to 125 cents per share.
During the period, the company was continuously invested in leveraging the brand strength, client relationship and the people across all business division.
Rob Adams who is the Chief Executive Officer and Managing Director of Perpetual Limited stated that Perpetual is one of the most reliable brands in the financial sector serving its clients for more than 130 years. However, during the 1H FY2019, the company faced an enormous challenge from the outcome of the Royal Commission and the volatile market environment which impacted the companyâs cash flows as well as the relative investment performance. In spite of these challenges, PPT was able to maintain discipline in cost management and continued its investment in the business and our people to support future growth. The challenges gave the company an opportunity to drive more consistent, quality growth across all three of our businesses, i.e. Perpetual Investments, Perpetual Private and Perpetual Corporate Trust.
Perpetual Investments
In Perpetual Investments, the companyâs profit before tax was down by 20% to $46.5 million as compared to the previous corresponding period. Lower average FUM drove the decrease in the PBT and lower performance fees earned.
The company,in spite of these challenges, tried to remain responsive to the evolving needs of the client. Mr Adams stated that the company would continue to deliver new investment vehicles to market as well as actively pursuing organic and inorganic growth opportunities followed by investment in new asset management capabilities.
Perpetual Private
In Perpetual Private, the companyâs profit before tax was down by 2% as compared to the previous corresponding period. The result remained consistent with the market condition during the period where the business received support from the ongoing cost discipline.
Mr Adams stated that, under this business, the client relationship across multiple generations is due to the deep trustee heritage and financial advice from the business. As a result, the Perpetual Private business is well positioned and is also growing. Through the client-focused business model and disciplined approach, the company would be able to attract right advisers and clients who will be benefitted from the ongoing investment in the evolution of our business. He also stated that the Perpetual Private strategy is well on track. The philanthropic business is also playing a critical role for the charitable trusts and endowment funds at the end of the first half with $2.5 billion in FUA.
Perpetual Corporate Trust
In Perpetual Corporate Trust business, the companyâs profit before tax was up by 13% as compared to the previous corresponding period to $22.4 million. The increase in the PBT in the Perpetual Corporate Trust business was due to the sustained market activity within commercial property and managed investment funds along with the higher asset prices.
In this business, the company provided its long-term client with the solutions in the debt capital market and also attracted new business from the global asset management sector. The company also acquired RFi Analytics business in December 2018 which further enhanced the expertise in data management.
The company remained focus on delivering digital solutions to the banking and financial services sector for comprehensive reporting and analytics which was being utilized by the client of Perpetual Corporate Trust to manage the risk, compliance and strategic needs.
The stock in the last six months has generated a negative return of 19.47%. At present, the shares of PPT settled the trading session at A$37.330 on 21 February 2019, up by 2.877%, as compared to previous trading dayâs closing price. The company has a market capitalization of A$1.68 billion with approximately 46.57 million outstanding shares.
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