The Pendal (ASX: PDL) share price is up around 3% after reporting its full year result for the 12 months to 30 September 2019.
Pendal Group is the new BT Investment Management. Having moved away from Westpac Banking Group (ASX: WBC), Pendal is now one of Australia’s largest fund managers, with more than $100 billion invested across its business.
Pendal’s FY19 Result
Pendal reported that its fee revenue fell 12% to $491.2 million with base management fees falling 4% to $482.6 million. Performance fees shrunk 89% to just $5.9 million this year. The average funds under management (FUM) during the year declined by 1% to $98.8 billion.
Management said a number of the funds underperformed their benchmarks, particularly those related to value and small caps.
The company’s operating profit before performance fees fell 8% to $198.5 million with the operating profit margin declining from 43% to 31%.
Cash net profit declined 19% to $163.5 million and statutory net profit dropped 24% to $154.5 million.
Pendal Management Comments
Pendal CEO Emilio Gonzalez said: “In a year of global flux, investors have become increasingly cautious and more risk adverse with significant shifts out of equities and into bonds and alternatives chasing yield.
“From our fund flow perspective, we saw outflows in our European and UK strategies with sentiment impacted by ongoing uncertainty around Brexit. Clarity over Brexit should see investor confidence improve.
“Pleasingly, our range of funds in the US continue to be well supported, and across the Group we are getting good traction on our income-generating strategies. In Australia, there were good institutional flows of $2 billion, predominately into cash and fixed interest, and US flows into the JOHCM multi-asset strategy were very encouranging.”
Pendal Dividend
The Pendal Board declared a final FY19 dividend of 25 cents per share, of which 10% will be franked and 90% will not be franked.
Pendal’s total dividend for FY19 is down 13% to 45 cents per share.
Outlook
Pendal remains confident on the future with the appointment of regional CEOs to bring more attention and focus to each region and take advantage of any opportunities.
The company was also pleased to take full ownership of Regnan this year, which is a leading ESG research, engagement and advisory business.
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