Magellan’s profit down 52%

Oksana Patron

21 August 2023

Magellan has reported a 52% drop in net profit after tax (NPAT) to $182.7 million for the 12 months to June, 2023.

In the announcement to the ASX, the fund manager said it continued to execute its five-year growth strategy and the board announced special dividend for the year of $1.167 per share.

Magellan also declared a final dividend of 35.6 cents per share and a performance fee dividend of 4.2 cps, taking the total ordinary dividends for the FY23 to 86.7 cps, 85% franked.

During the financial year, its average funds under management slipped to $48.8 billion from $94.3 billion a year before.

The fund manager’s chief executive and managing director, David George, said the primary focus during the year was on delivering the investment performance and he was ‘encouraged’ that the changes resulted in improved efficiency.

“Investment ideas are being brought forward earlier and prioritised more efficiently,” he said.

“These changes have facilitated early signs of performance improvement, in particular, in our global equities strategy which outperformed the benchmark over the second half of the financial year and contributed $11 million in performance fees.

“We have remained vigilant in managing our costs and capital. Our FY23 funds management business operating expenses of $121.3 million were below our FY23 guidance target range.

“We anticipate further cost benefits from changes made to floe through in FY24 and onwards, with our Fy24 funds management business operating expenses expected to be between $95 million to $100 million,” he said.

As a result of structural improvements in the investment team, the board determined to revert its investment team leadership to its former ‘business as usual’ structure, with George as CEO and managing director and Gerald Stack as head of investments.