Perpetual lifts profit as funds under management falls

The wealth management firm has upped its payout after posting a solid profit lift in the face of declining revenue.

Perpetual today booked a net profit of $132 million for the year through June, an 8 per cent increase year-on-year

Wealth management and investment company Perpetual has lifted its dividend after a hefty increase in net profit, despite facing pressures of falling funds under management and falling equity markets.

Perpetual (PPT) today booked a net profit of $132 million for the year through June, an 8 per cent increase year-on-year

The ASX-listed group saw a 2 per cent decline in revenues to $489.6m.

The dip in revenue came alongside a fall in funds under management to $29.4 billion at the end of the year, down from $30.2bn over the period. The group booked net outflows of $300m over the year, compared to net inflows of $300m a year earlier, and $1.1bn worth of inflows two years ago.

Average funds under advice per Perpetual Private client, usually high net wealth, fell to $3.6m compared to $4.5m a year ago, but the group added 100 new clients to the advice business. Still, funds under advice dipped 3 per cent to $12.7bn.

Underlying profit across the group slipped 4 per cent to $128m. However, Perpetual declared a fully-franked final dividend of $1.30, bringing the year’s total payout to $2.55 — up 6 per cent on the prior year.

Chief executive Geoff Lloyd said it was a solid result amid challenging conditions. “Our dividend growth reflects the strength of our business model and the diversity of our revenue and earnings,” he said.

Perpetual Investments logged a 6 per cent slide in profit before tax, falling to $118.1m. More than 90 per cent of the group’s funds are in the top two quartiles for performance over a five-year period.

The company’s financial advice business, Perpetual Private, saw profit dip 9 per cent to $34.2m over the year, with the soft result driven by falling equity markets and the company outlaying investment in the unit for growth, including the acquisition of The Private Practice and Fintuition.

“With a view to being Australia’s premier high net worth advice business, we are pleased Perpetual Private has now delivered six consecutive halves of positive flows and net new client growth,” Mr Lloyd said.

In the company’s trustee services arm, profit increased 9 per cent to $34.1m. “We have seen good growth in Perpetual Corporate Trust which has built on its market leading position in securitisation to broaden our range and depth of offers,” Mr Lloyd said.