Perpetual reports record profit and Lifts dividend
13 Aug 2002
Perpetual has reported an increase in after tax profit (excluding gains on investment sales) of 44 percent to $58.7 million for the year ending 30 June 2002.
Net gains realised on the sale of investments were $16.9 million, boosting net profit to $75.6 million for the year - an increase of 38 percent over the previous year.
The board has declared a final dividend of 60 cents per share, fully franked at 30 percent, payable on 20 September (record date 6 September) bringing normal dividends for the year to $1.10 per share (85 cents for the previous year).
In addition to normal dividends, shareholders received a special dividend of 50 cents per share paid in June. Subject to continued satisfactory performance and prospects, the board intends to continue its policy of increasing normal dividends, and also to pay a similar special dividend in June 2003, at which time consideration will be given to the continuation of the special dividend in 2004.
Perpetual chairman Mr Charles Curran said that the full year result was very satisfying for a financial services company in a difficult operating climate.
"The group continued to generate strong cash flow from operations, with our earnings before interest, tax, depreciation and amortisation (EBITDA) amounting to $100.7 million - up 23 percent from $82.0 million last year," he said.
"Over the past two years we have built up substantial cash reserves resulting from joint-venturing our share registry business and selling Perpetual Fund Services. The group has the financial capacity to pursue organic growth and also to make acquisitions should we identify opportunities to create sustainable value for our shareholders," Mr Curran said.
Perpetual's managing director Mr Graham Bradley said that the group's performance remained strong despite the challenges created by high profile corporate collapses in Australia and the USA, and volatile equity markets around the world.
"In challenging trading conditions, all our divisions performed well. Revenues for our continuing businesses, after the sale of Perpetual Fund Services and the deconsolidation of our share registry business, rose from $208.4 million to $244.1 million for the year, a healthy increase of 17 percent.
"One of the highlights of the year was the strong increase in funds under management by Perpetual Investments which increased from $15.6 billion to $19.4 billion at 30 June. This increase was aided by our excellent performance in Australian equities.
"Despite volatile equity markets, we achieved top quartile, positive returns in Australian equities for our investors. Our Investor Choice Smaller Companies asset group was the top performing rated Australian equity fund for the year to 30 June, returning 27.8 percent (pre-fees) against a benchmark of -1.7 percent. Our flagship Industrial Share Fund returned 7.3 percent (pre-fees) for the year compared to -5.6 percent for the S&P ASX300 Industrials Accumulation Index, reflecting the strength and capability of our equities team and our disciplined approach to selecting investments," he said.
"Personal Financial Services performed well during the year, adding $700 million in new fund inflows, including more than 650 new portfolio management accounts entrusting $390 million to our care. Revenues increased to $66.3 million - up from $63.2 million last year.
"Corporate Trust had a strong year with revenues increasing from $30.7 million to $36.6 million. Securitisation funds under administration grew to $52.3 billion, an increase of 24 percent and we gained several major new clients in this area including Mirvac, AM Corporation and ING.
"Our share registry joint venture, ASX Perpetual Registrars, which is now reported as an associate, launched its new share registry system which is already delivering service benefits to APRL's clients. Our share of APRL's net profit for the year was $0.55 million, an improved result over the previous year," he said.
Mr Bradley said that global events continue to provide challenges with equity markets in decline and the resulting adverse effect on investor confidence.
"Inflows in July 2002 continued to be strong. The year ahead may, however, present a more difficult market environment and, while we are confident that our revenue and profit will continue to grow, the rate of growth may not match that of recent years. Against this background, we will continue to focus on our chosen market segments in wealth management and corporate trust services.
"We believe Perpetual is well placed to continue to grow, based on our trusted brand and reputation, our long history of client service and advice, and our proven investment philosophy," Mr Bradley said.