Australian Ethical NPAT rises 80%, appoints former Pendal CEO

Australian Ethical has reported an 80 per cent growth in its statutory net profit after tax (NPAT) for the 2023–24 financial year.

Announcing its FY24 results on the ASX, the investment manager’s NPAT grew to $11.8 million from $6.6 million in the previous financial year.

The strong result was helped by $100.5 million in revenue, up by 24 per cent from $81.1 million in FY23.

In April 2024, Australian Ethical also hit the $10 billion funds under management (FUM) milestone that now stands at $10.4 billion as at 30 June 2024, a rise of 13 per cent from the previous financial year.

The firm’s FUM growth was underpinned by net inflows of $607 million, an increase of 30 per cent from $470 million in FY23, primarily thanks to superannuation flows.

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In May 2024, Australian Ethical also announced it had entered into a binding agreement to acquire Altius Asset Management from Australian Unity – a sustainable fixed income asset management business.

The deal is expected to increase its FUM by $2 billion to $12.4 billion, generate approximately $1 million in annualised EBITDA uplift, and grow its institutional client base upon completion in September 2024.

Australian Ethical delivered a fully franked final dividend of 6¢ per share, producing a total FY24 dividend of 9¢ – up by 29 per cent from FY23.

Reflecting on the results, John McMurdo, Australian Ethical chief executive, said: “This has been a significant year for Australian Ethical – reaching $10 billion in FUM, $100 million in revenue and with record profit, dividend and foundation donations. These results demonstrate that maintaining our focus on sustainable growth and improving our offer to customers, is delivering positive outcomes for our shareholders.”

The CEO added that the firm is well set up for future growth in the next financial year and beyond, building off its “milestone” FY24 result.

“We believe FY25 will be the start of the next stage of our growth story, as we continue to optimise organic and explore inorganic opportunities, with our stronger business capability,” McMurdo said.

Speaking on an investor webinar, the CEO also flagged the firm’s interest in private markets, which it intends to expand into further. He said: “We also see new revenue opportunities through asset class and product expansion, in areas like private markets and international equities.”

Meanwhile, John Woods, Australian Ethical deputy CIO and head of multi-asset, described: “Private markets, by its very nature, is a broad asset class. We recently hired a new head of private markets, Adam Roberts, to develop this strategy further. Late last year, we also launched our first offering in this space: the infrastructure debt fund. We see a number of ways to expand it further, here domestically and internationally.”

Board appointment

In addition, Australian Ethical announced it has appointed former Pendal CEO Richard Brandweiner to its board as an executive director, commencing on 1 September 2024.

Brandweiner spent five years as Pendal’s CEO up until its merger with Perpetual in January 2023.

He is currently the chair of Impact Investing Australia, and was previously the CIO at First State Super (now Aware Super).

Australian Ethical chairman Steve Gibbs said: “Richard is a seasoned executive and non-executive investment management professional, with a distinguished track board of business and social impact success.”

Commenting on his own appointment, Brandweiner said: “I am very much looking forward to working with the board and the management team to make an ongoing positive difference to members, clients and the world more broadly.”