Investment house Perpetual has blamed mounting regulatory costs and disruptive geopolitical and macro-economic conditions for falling earnings at its financial advice and funds management businesses, which saw its profit slump 14 per cent in the latest half.
Net income dropped to $51.6 million in the six months through December, from $60.2 million in the same period last year, the Sydney-based financial services company said in a statement to the ASX on Thursday.
Perpetual Investments saw profit before tax tumble 20 per cent to $37.2 million as investors pulled $1.5 billion out of its funds under management and it earned lower performance fees. Earnings at the financial advice business, Perpetual Private, slumped 23 per cent to $17.4 million as the company digested its acquisition of Melbourne-based risk advisor company Priority Life and hired new advisers to its network.
Perpetual chief executive Rob Adams said challenging geopolitics had hurt the group’s performance. Credit:
The losses were slightly buffered by gains in Perpetual's corporate trust, which grew profits by 23 per cent thanks to "solid growth" in commercial property and managed investment funds as well as higher asset prices.
Chief executive Rob Adams said that while the entire financial services industry was impacted by challenging conditions, the diversity of Perpetual's three businesses would pave the way for growth in the future.
"During the first half of the year, regulatory, macro and geopolitical influences continued to disrupt the financial services industry, impacting the asset management and advice sectors," he said.
"The diversity of our three businesses enabled us to adapt and position the group for growth while remaining focused on supporting our clients and their needs," Mr Adams said.
The half-year results come after Perpetual acquired US-based social investor group Trillium Asset Management last month, adding an additional $5.5 billion in funds under management to the group. Mr Adams said this acquisition would help Perpetual expand its "geographic reach".
"Our acquisition of Trillium Asset Management will enable us to better meet the evolving expectations of our stakeholders as the ESG [environmental, social and corporate governance] revolution continues with demand for investments providing both positive returns and a positive long-term ESG impact."
The company will pay a fully franked interim dividend of $1.05 a share, down from $1.25 a year ago.
More to come.
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