Despite the announcement of a soaring first half profit result this morning, shares of asset management firm, Perpetual Limited (ASX: PPT), have traded nearly 3% lower today.
In the six months to 31 December 2014, Perpetual's underlying profit after tax was $62.1 million, up 30% on the prior corresponding period, whilst net profit after tax, or NPAT, was an impressive 76% higher at $58.6 million.
Pleasingly, Perpetual declared an interim dividend of 115 cents per share, up 44% from a year earlier, on the back of earnings per share of 126.8 cents.
CEO and Managing Director, Geoff Lloyd, said the results are a reflection of the company's Transformation 2015 strategy: "Through our Transformation 2015 program, we've created a strong platform for growth in each of our businesses," he said.
Operating revenue was 21% higher than the prior corresponding period, at $224.5 million, which was largely a result of increasing funds and assets under management, whilst total expenses climbed 16% to $156.6 million. The group's cost to income ratio fell to 64%, from 67% in the second half of the 2014 financial year.
All three business units – including Perpetual Investments, Perpetual Private and Perpetual Corporate Trust posted increased profits – year over year.
Is it time to buy Perpetual?
The funds management industry is highly leveraged to investor confidence and global share market performance. And with major share markets pushing much higher since the GFC, if you're a long-term investor, it's probably wise to hold off buying shares in funds management firms such as Perpetual, for now.
