The Magellan Financial Group Ltd (ASX: MFG) share price is trending slightly lower today after the company reported its half-year earnings for the 2020 financial year (1H20) to the ASX this morning.
Magellan shares closed at $72.41 yesterday (which coincidentally was a new all-time high) but opened even higher this morning at $73.51 and has since set a new all-time high of $74.21.
The Magellan share price has dipped a little since and is now down 0.37% to $72.14 at the time of writing.
What did Magellan announce this morning?
Magellan reported that the company's average funds under management (FUM) has now swollen to $92.8 billion – a 29% surge from the $72.1 billion the company reported in 1H19.
Net profit after tax increased 13% to $195.7 million, up from $173.5 million in 1H19, while adjusted profits were also up 23% to $216.8 million.
Diluted earnings per share (EPS) also increased by 10% to $1.082, up from $0.982 in 1H19. On an adjusted basis, this turns into a 20% rise to $1.199 per share.
These strong results have enabled Magellan to increase its interim dividend. The payout will be 92.9 cents per share, a 26% rise from Magellan's last interim dividend of 73.8 cents per share. This payment will go 'ex-dividend' on February 18, 2020, and will be paid on February 27.
In the ASX release, Magellan's CEO Brett Cairns had this to say:
"Magellan had a successful first half that has been underpinned by strong investment performance. Average funds under management grew 29% to $92.8 billion, leading to a 27% increase in management fee revenue to $285.9 million and adjusted net profit after tax increased 23% to $216.8 million. We continue to focus on our clients.
Delivering on our investment objectives, helping meet client needs and continuing to simplify investor experiences will ultimately lead to strong financial outcomes for our shareholders over time."
Outlook for Magellan
Whilst the company did not provide any future guidance for the remainder of the 2020 financial year, Mr Cairns has discussed a few of Magellan's upcoming projects:
"We (Magellan) have also made good progress developing a client solution for retirement income and expect, at this stage, to be able to launch the Magellan Retirement Fund before the end of the financial year."
He also stated that, "we expect to make the Airlie Australian Share Fund available on the ASX in the coming weeks".
I'm sure Magellan shareholders will be paying close attention to these two initiatives, which have the potential to significantly increase Magellan's FUM throughout the remainder of FY20 and into FY21.
