Magellan on Friday reported a net profit after tax of $251.6 million for the first half, a boost of 24 per cent on the prior period.
In an ASX listing, the wounded fund manager declared an interim dividend of $1.101 a share, up from 97.1 cents.
Its adjusted net profit after tax sat at $248.1 million, up 16 per cent, driven by a 12 per cent increase in average funds under management to $112.7 billion.
The news prompted Magellan’s share price to lift over 6 per cent to $19.58 per share when trading opened on Friday morning.
February has been a tumultuous month for the fund manager sparked by the announcement that chief investment officer Hamish Douglass would be taking an indefinite leave of absence on medical grounds. Just last year, Magellan suffered a hefty setback when St James’s Place withdrew its mandate worth $24 billion in funds under management.
But addressing the firm’s better than expected results on Friday, Kirsten Morton, interim CEO, highlighted Magellan’s “robust balance sheet” with no debt and net tangible assets of $992.8 million.
“We are focused on our core funds management business and delivering upon our investment objectives for our clients,” Ms Morton said.
Alongside its financials, Magellan confirmed several capital management initiatives including placing all new investments via Magellan Capital Partners on hold. The fund manager is also considering implementing an on-market share buy-back and intends to issue approximately 10 million unlisted options to its staff.
“We believe the capital management initiatives announced today will be attractive to shareholders and reflect our focus on our core funds management business. These initiatives and proposals are in line with our aim to deliver capital efficiency, solid dividends and attractive returns for shareholders,” said Hamish McLennan, Magellan’s chairman.
Underlining Magellan’s “strong financial health”, Mr McLennan reflected on recent events, noting “there is more work to do”.
“I am very confident Magellan has the team and processes to overcome recent setbacks, and we remain extremely focused on improving outcomes for shareholders,” he said.
Just last week, Magellan confirmed its funds under management (FUM) sunk 6.8 per cent to $87.1 billion as at 9 February, pinning it on comprised market movements, cash distributions paid in January, new outflows and client redemptions.
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
