Magellan Financial Group has reported a flat operating profit of $83.1 million, as lower funds management fees were offset by contributions from its stakes in Barrenjoey and Vinva. Magellan is an Australian-based global fund manager. The company provides investment management services to retail, high net worth and institutional investors.
The group saw a modest 5 per cent rise in earnings per share, reaching 49.6¢, and increased its interim dividend by 50 per cent to 39.5¢, elevating its dividend payout ratio to 80 per cent of operating profits. However, the statutory profit declined by 27 per cent to $68.9 million due to valuation adjustments. Magellan’s assets under management have decreased from a peak of $117 billion in 2021 to $39.9 billion. This is attributed to underperformance, competition from passive funds, and the departure of executive Hamish Douglass.
Despite these challenges, overall assets under management stabilised during the period as retail outflows were balanced by new institutional mandates. Investment management revenue decreased by 27 per cent to $106.9 million, even as outflows were contained. This was due to a decline in average management fees to 55 basis points and the absence of performance fees.
A notable positive was the contribution from Magellan’s strategic investments in Barrenjoey and Vinva, which added $25.7 million to earnings, more than doubling the first half of 2023. Barrenjoey distributed an $8 million dividend to Magellan, while Vinva paid $9.8 million. Magellan also reported returning $105 million to shareholders through dividends and buybacks during the half-year period and holds $504 million in liquid capital.
