Perpetual ups profit forecast
Strong performance of equities funds and growth in the wealth management division has offset costs relating to legacy issues for Perpetual Investments, and led the company to forecasting a 13 per cent increase in profits for the 2006 tax year.
In a letter to shareholders, Perpetual chairman Robert Savage said the current outlook suggested 2006 would be another good year for the company’s profitability and predicted a 13 per cent increase in operating profit after tax from the company’s $116.3 million result in 2005.
He said this profit would provide a healthy base for further growth in 2007.
Contributors to the result included Perpetual Private Clients’ funds under advice increasing by 14 per cent to $6.5 billion between June 30, 2005, and April 30, 2006.
“The profitability of this business has increased due to growth in volumes, improved efficiencies and a revision of our fee structure,” Savage said in the letter.
In total, funds under advice and administration increased from $7.3 billion to $8.1 billion during the period.
The company also reported an increase in funds under management (FUM) of 27 per cent or $7.2 billion, bringing total FUM to $33.9 billion as at April 30, 2006. Net inflows accounted for around $2.0 billion of this increase, with the remainder resulting from growth in the equities funds.
The increase comes despite warnings at the half-year results of costs totalling around $2.0 million post-tax for a review of legacy issues in the company’s policies and practices around administration processes, including unit pricing.
“This review continues and we expect it to be completed by the end of the financial year,” Savage said.
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