Magellan’s financials point to company in turmoil

In an ASX listing on Thursday, Magellan revealed its adjusted net profit after tax sunk 60 per cent on the year to $98.3 million, while statutory net profit after tax lost 67 per cent to $83.8 million.

Profit before tax and performance fees for the funds management business ended at $119.9 million or 59 per cent down on the prior year.

Average funds under management (FUM) for the half year was $53.8 billion, compared to $112.7 billion last year.

The embattled fund manager declared a dividend of 46.9 cents per share for the six months to 31 December 2022, down 57 per cent from a year earlier.

Commenting on the results, Magellan chief executive officer and chief investment officer, David George, said while the firm has experienced a period of “accelerated and substantial change” in recent times, “we now have a well-defined and actionable five-year strategy which builds upon the qualities that have made us successful”.

The firm is also implementing an ongoing strategy to diversify the business to deliver sustainable growth and revenue.

“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,” Mr George said.  

“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.”

According to Mr George, Magellan remains a business of considerable financial strength.

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