Platinum Asset Management (PTM) H2 2024 earnings summary

Executive summary

• FY24 marked by a 25% decline in funds under management (FUM) to AUD 13.0b, driven by AUD 4.9b net outflows and product rationalisation, despite positive investment returns.

• Statutory net profit after tax fell 44% year-over-year to AUD 45.1m, with basic EPS at 8.0 cents.

• Major organisational changes included a new CEO, team restructuring, product review, and a new client engagement strategy.

• Turnaround plan focused on cost reduction, product simplification, and investment platform enhancements, transitioning to a growth phase.

• New growth strategy announced, targeting product innovation, partnerships, and leveraging a strong balance sheet.

Financial highlights

• Management fee revenue was AUD 174.4m (down 13% year-over-year) due to lower average FUM; performance fees were negligible.

• Adjusted EBIT margin for H2 FY24 at 48%; adjusted EBIT was AUD 82.9m (down 19%).

• Statutory net profit before tax AUD 73m; profit after tax AUD 45.1m, impacted by AUD 20m in turnaround costs (mainly non-cash adjustments).

• Final fully franked dividend of AUD 0.04 per share, full year AUD 0.10, yielding 9.6%.

• Net assets at AUD 314m, with AUD 250m in cash and AUD 64m in seed investments.

Outlook and guidance

• The company is entering a growth phase, focusing on enhancing the investment platform, expanding product and distribution capabilities, and exploring organic and inorganic growth opportunities.

• New Platinum-managed products and sub-advisory business line (Partner Series) to diversify asset classes, with the first fund expected in early 2025.

• Cost savings of AUD 25m (26% reduction in annualised expense base) expected to be progressively realised in FY25 and FY26.

• Confident in turnaround progress, with further enhancements to investment platform and remuneration alignment underway.

• Management expects continued dividend distributions, subject to capital requirements.