Interim profit for Magellan down 60%

Magellan Financial Group has reported a 60 per cent drop in adjusted net profit after tax (NPAT) for its half-year results ending 31 December 2022 (1H23), falling from $248.5 million the year before to $98.3 million.

This comes as the fund manager also said in an announcement to the Australian Securities Exchange (ASX) that its average funds under management had also declined by 52 per cent from $112.7 billion in 1H22 to $53.8 billion in 1H23, after recording significant fund outflows due to global equities market conditions.

The firm also declared a 67 per cent fall in interim statutory NPAT from $251.6 million to $83.8 million.

Magellan chief executive and Chief Investment Officer, David George, said the interim results reflect the manager’s withstanding of recent “accelerated and substantial change” as it works to deliver on its new strategy for growth after making several “active changes” within the business.

“We now have a well-defined and actionable five year strategy which builds upon the qualities that have made us successful, while further diversifying the business to deliver sustainable growth and revenue,” he said.

“Meaningful transformation takes time. Whilst it is still early days, I can report that we are making good progress in delivering on our FY23 strategic priorities and are encouraged by the improving trends that are emerging.

“In the last six months we have launched new strategies, refined our plan around staff retention and enhanced our investment process to improve how we collaborate and generate ideas. These are key first steps in delivering on our five-year target of $100 billion in funds under management by 2027.”

The Magellan Board has also announced an interim dividend of 46.9 cents per share, 85 per cent franked.

“Magellan remains a business of considerable financial strength,” George said.

“Our strong balance sheet, operating cash flows and profitability provide us with the ability to continue to pay dividends within our policy of 90 to 95 per cent funds management profit, implement capital management initiatives designed to enhance shareholder value and prudently invest in our business and execute our strategy.”