Regal Partners (RPL) H1 2024 earnings summary

Executive summary

• Normalised NPAT for 1H24 was $59.0m, up 349–350% year-over-year, with statutory NPAT at $50.2m; strong organic cash generation and recent acquisitions contributed to growth.

• Revenue rose 212% to $148.5m, driven by strong performance fees and FUM growth.

• FUM reached $12.3bn at 30 June 2024, rising to $16.5bn pro forma post-acquisitions of Merricks Capital and Argyle Group, up 50% since December 2023.

• Acquisitions of Merricks Capital and Argyle Group accelerated diversification, scale, and broadened investment capabilities.

• Net client inflows totaled $745m for the half, up 106% year-over-year.

Financial highlights

• Management fees increased to $60.6m, up 106%, and performance fees surged to $59.6m, up 645% year-over-year.

• Total net income for the half was $148.5m, up 212% year-over-year.

• Cost-to-income ratio improved to 43% from 58% in 1H23.

• Fully franked interim dividend increased 60% to 8c per share.

• Basic EPS was 19.31c, and fully diluted normalised EPS was 17.0c, up 254% year-over-year.

Outlook and guidance

• Confident in maintaining positive net flow outlook, with institutional mandates under review and no diminished confidence in future flows.

• Expectation of further growth in performance fees as more FUM approaches high water marks; 70% of eligible FUM at or above high-water mark as of 30 June 2024.

• Disciplined approach to future acquisitions, with readiness for further transactions and ongoing investment in distribution and product innovation.

• Anticipates global investors will grow as a percentage of total FUM over the next 3–5 years.

• Management expects further fee growth from reduction in staff FUM rebate, potentially adding $7m in annual management fees.