In its full-year results posted to the ASX on Wednesday, Magellan Financial Group reported a 2 per cent increase in adjusted net profit after tax (NPAT) to $177.9 million.
Statutory NPAT was reported to have grown by 31 per cent to $238.8 million, while profit before tax and performance fees for Magellan’s funds management business was down 25 per cent to $158.3 million.
“Magellan has made significant progress in FY24, restoring stability across our business and establishing the foundations for future growth,” Magellan’s executive chairman, Andrew Formica, said.
“Our financial results reflect the resilience of our business following a challenging few years.”
Average funds under management (FUM) over the 2024 financial year stood at $36.8 billion, 25 per cent lower than in the 2023 financial year, when this figure sat at $48.8 billion.
Magellan had $36.6 billion in FUM as of 30 June – comprised of $17.1 billion in retail assets and $19.4 billion in institutional assets – across its three investment strategies, with Formica adding that this rose to $38.4 billion at the end of July.
Across said strategies, global equities saw outflows of some $5.7 billion through the year, with $3.2 billion stemming from its institutional channel.
Infrastructure, meanwhile, saw new outflows of around $500 million, while Airlie reported net inflows of $300 million over the period.
However, the firm said that quarterly retail net outflows continue to show signs of improvement, while the firm had its first positive quarter of net institutional inflows in over two years in the fourth quarter of FY2023–24.
“Net flows have continued to stabilise in both retail and institutional channels, and we have secured significant client wins. Particularly pleasing is seeing a return in the institutional channel, demonstrating the confidence new and existing clients retain in Magellan,” Formica said.
The performance of its investment strategies generated $19.2 million in performance fees, the highest since FY20–21, and funds management business operating expenses were down 16 per cent on FY22–23 to $102.4 million.
“Importantly, we addressed several legacy issues that have helped to restore stability to the business and position us for future success.
“These include successfully implementing transitional leadership arrangements, resolving the Employee Share Purchase Plan loans for our staff and introducing a new remuneration framework, as well as converting the Magellan Global Fund Closed Class into the Open Class.”
Looking ahead, Formica said the group is now focused on its strategic objectives and growth.
Magellan inks deal
Also on Wednesday, Magellan announced a strategic partnership with $22 billion fund manager Vinva Investment Management, an active systematic equity strategies specialist.
As part of the partnership, Magellan has acquired a 29.5 per cent equity stake in Vinva’s parent entity, Vinva Holdings Limited, and will distribute Vinva’s products and investment strategies through its global distribution team as part of an exclusive distribution arrangement, excluding Australian institutional clients where Vinva will maintain its focus.
Magellan said it also intends to collaborate on new product initiatives in Australia and globally.
“While there is still work to be done, our financial position is strong, we have consistently generated robust operating cashflows and are highly profitable.
“This resilience and strength enables us to continue paying attractive dividends to shareholders while also investing for the future. Our progress this past year is encouraging, and we’re actively positioning the business to deliver positive outcomes for both clients and shareholders,” Formica said.
Magellan’s board declared dividends of 35.7 cents per share, comprising a final dividend of 28.6 cents per share and a performance fee dividend of 7.1 cents per share.
