Australian Ethical’s (AE) net profit after tax rose 46 per cent to $9.5 million, driven by growth in new customers, record net inflows, and the Emerging Companies Fund performance fee. AE inflows hit $660 million – up 100 per cent from FY19 – following the devasting bushfires earlier in the year and impact-focused marketing campaigns executed during the year.
“We have seen record inflows, delivered market-leading returns and executed strategic projects all while transitioning effectively to remote working as part of our business continuity management during a highly unusual pandemic,” said CEO John McMurdo.
“During this time our business model has proven to be resilient, agile and adaptable. Our strong performance is testament to the strength of our people, our brand and our position in the market as Australia’s leading ethical investor.”
But Mr McMurdo warned that AE might not be able to pull off a repeat of the strong results despite its lack of debt, solid cash flows and positive net inflow momentum.
“Like all fund managers we are highly leveraged to the markets at a time when economic uncertainty remains high, interest rates low and COVID-19 still unbeaten,” Mr McMurdo said.
“FY21 will be a difficult year as market volatility continues and our revenue growth is partly [suppressed] by the [full-year] impact of the super fee reductions we implemented for the benefit of future and current members. We are also aware that any performance fee generated by the Emerging Companies Fund is not guaranteed year-on-year.”
Operating expenses increased by 16 per cent to $37 million during FY20, reflecting investment in business capability, higher fund-related costs driven by increasing FUM and delivery of “key strategic initiatives”, including product development and a brand campaign. AE will pay out a final dividend of 2.5 cents per share.
