Australian Ethical Investment (AEF) H2 2025 earnings summary

Executive summary

• Achieved record Funds Under Management (FUM) of $13.94 billion, up 34% year-over-year, driven by organic net flows, investment performance, and the Altius/LTS Asset Management acquisitions.

• Revenue increased 19% to $119.4 million, with underlying profit after tax (UPAT) up 29% to $23.8 million and net profit after tax (NPAT) up 68% to $19.9 million.

• Enhanced business platform through technology upgrades, operational transitions to GROW Inc and State Street, and key talent hires.

• Brand awareness doubled to 22%, with multiple industry awards and top ratings for ethical and investment leadership.

• Record $2.8 million donation made to the Australian Ethical Foundation, with 10% of profits allocated to charitable causes.

Financial highlights

• Operating revenue rose 19% to $119.4 million, supported by 31% average FUM growth and partially offset by a lower average revenue margin.

• Operating expenses increased 14% to $84.5 million, mainly from employee and fund-related costs, offset by cost savings from platform transitions.

• Cost-to-income ratio improved to 71.4% from 73.7% in FY24, reflecting revenue growth and cost efficiencies.

• Dividend for the year was $0.14 per share, up 56% from FY24.

• Underlying diluted EPS rose to 20.90 cents, with five-year underlying EPS growth at a 20% compound annual rate.

Outlook and guidance

• Confident in sustaining organic FUM growth, supported by Superannuation Guarantee rate increases, investment performance, and member engagement initiatives.

• Expect continued moderation in pricing, incremental improvements in cost-to-income ratio, and further reinvestment in growth opportunities.

• Full-year benefits from cost-saving initiatives and platform enhancements in FY26.

• Medium-term opportunities include expanding fixed income, private markets, and international equities offerings.

• Modest decline in FY26 revenue margin expected due to incremental fee reductions.