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COVID hit drags Perpetual profit

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Perpetual recorded an $82 million net profit for the full year, down by 29 per cent as it clocked lower revenue from COVID-depleted funds.

The group generated $489.2 million in revenue, which had fallen by 5 per cent year-on-year. Perpetual had felt the impacts of COVID through net outflows and lowered fees.

Performance fees were 11 per cent lower for financial year 2020, down to $3.1 million.

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Still, the board declared a final ordinary dividend of 50 cents per share – bringing the total FY20 dividends to $1.55 a share. 

Perpetual chief executive and managing director Rob Adams said the diversified business model had provided some protection against the market volatility. 

“The S&P/ASX All Ordinaries Price Index closed the year 10 per cent lower than financial year 2019, which had a direct impact on the group’s market-related revenues generated by funds under management (FUM) in Perpetual Investments and funds under advice (FUA) in Perpetual Private in the second half,” Mr Adams said. 

“In addition, net outflows from Perpetual Investments, whilst slowing through the year, led to lower revenue for the full year.”

The investments business generated a profit before tax of $55.4 million, which was down by 31 per cent, as it copped $2.6 billion in net outflows, performance fees lower by 11 per cent and a market shake-up in the second half.

Outflows in the institutional and intermediary channels were primarily exiting Australian equities.

Perpetual made moves to expand out into the US in the past year – having bought ESG specialist Trillium Asset Management and a majority stake in US asset manager Barrow Hanley.

Trillium now represents 20 per cent of Perpetual Investments’ FUM and it recently launched products in Australia. Perpetual has signalled it will be building out its US distribution team and its reach to the US, Europe and Asia.

Meanwhile Perpetual Private saw a profit before tax of $30.1 million for the year, down 27 per cent. 

The segment had grown its adviser network, adding 20 advisers with 150 high-net-worth clients during the year – contributing to net inflows of $600 million for the year. 

Perpetual had also acquired risk advisory firm Priority Life during FY20. 

Perpetual Corporate Trust on the other hand saw growth – managing a profit before tax of $55.2 million, a 16 per cent rise.

Mr Adams said while the COVID environment challenges are expected to persist in the short-term, the medium to long-term outlook for the group is positive. The Barrow Hanley and Trillium acquisitions are expected to have a material impact on Perpetual’s revenue and expense profile in the coming year.

 

COVID hit drags Perpetual profit
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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