The Fund manager who specialises in global equities investing, Platinum Asset Management Limited (ASX: PTM) has published its half-year report ended 31 December 2018. The company runs a funds management business.
Despite challenging investment markets, overall average FUM for the half-year ended 31 December 2018 was similar relative to the average FUM for the previous corresponding period, with net inflows of $689m being received from clients. The underlying funds management business proved resilient with management fees increasing by 2.5% for the half-year when compared to the previous corresponding period. The profit before income tax expense, excluding performance fees, for the Funds management business was $111m for the half-year ended 31 December 2018, up 6% on the previous corresponding period.
On 7 February 2019, PTM had notified regarding FUM of $24.65 billion, reflecting a marginal increase compared to FUM by the end of the December 2018.
Total expenses decreased by $3.1 million or 7.5% from the previous corresponding period. The decrease is primarily related to a 41% decline in the provision for staff incentive payments (and related on-costs) from $14.3 million at 31 December 2017 to $8.4 million at 31 December 2018. This decline was mostly due to investment team remuneration being closely aligned with investment performance although the provision also includes an estimate for discretionary awards under the general employee plan.
Throughout the last few years, Platinum has greatly expanded the range of investment products thereby growing its investor base and FUM. This strategy often requires PTM to seed these new investment products. Seeding is, therefore, an essential and integral part of the company’s overall growth strategy.
The Company has consistently paid shareholders over 90% of the Company’s profit after tax, as dividends. It is because the Company’s capital requirements have been limited. Since the end of the half-year, it declared a 2019 interim fully-franked dividend of 13 cents per share ($75,817,000) with a record date of 1 March 2019 and payable to shareholders on 18 March 2019. A 2019 interim dividend of 13 cents per share represents a distribution of slightly more than 100% of its earnings per share for the half-year ended 31 December 2018.
While the Company has a Dividend Reinvestment Plan in place, it has not been activated. The Net tangible assets per share were $0.74 on 31 December 2018 as compared to $0.70 on 30 June 2018.
FUM at 31 December 2018 was $24.1 billion, and this represented a decline of 6.3% when compared to the 30 June 2018 FUM of $25.7 billion. The reduction in FUM was driven by a decline in investment performance of $2.2 billion. Despite the decline in investment performance, net fund inflows remained resilient with $0.7 billion in net inflows for the half-year. The increase in net fund inflows included ongoing growth in the company’s recently created products, with two ASX quoted managed funds, Platinum International Fund and Platinum Asia Fund benefitting from net fund inflows of $163.9 million for the six months to 31 December 2018. At 31 December 2018, total FUM in the quoted managed funds was $436.2 million.
At the end of the trading session (as at 21 February 2019) the stock price of the company stood at A$5.130, up by 6.875% from its previous close.
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