Perpetual Faces Asset Management Outflows Amid Wealth Management Sale Uncertainty

Steady Financial Performance in a Challenging Year

Perpetual Limited (ASX – PPT) has reported its FY25 financial results, revealing a largely stable underlying profit after tax (UPAT) of $204.1 million, a marginal 1% decline from the previous year. Operating revenue rose 3% to $1.373 billion, reflecting growth across its core business lines despite headwinds in asset flows and ongoing corporate uncertainty.

The company’s Simplification Program has been a standout, delivering $44 million in annualised cost savings ahead of schedule, surpassing the initial target of $30 million for FY25. This program aims to reduce costs by $70 to $80 million annually by FY27, focusing on streamlining operations and decentralising core functions.

Asset Management – Navigating Outflows and Market Dynamics

Asset Management experienced net outflows of $16.2 billion, a significant challenge offset in part by positive market movements and currency effects. Despite these outflows, the division maintained stable underlying profit before tax, supported by higher performance fees totaling $34.3 million and cost efficiencies from the Simplification Program.

Performance varied across Perpetual’s boutique asset managers, with credit strategies performing strongly while value-style equities faced headwinds. The firm is actively reshaping its distribution approach, particularly for J O Hambro, and expanding its presence in growth markets such as the US and Europe.

Corporate Trust and Wealth Management – Growth and Resilience

Corporate Trust continued its growth trajectory, with Funds Under Administration increasing by 5% to $1.2 trillion. This was driven by a robust securitisation market and expansion in digital and markets services, which saw an 18% revenue increase. The division’s investment in technology and client products underpins its long-term growth ambitions.

Wealth Management demonstrated resilience despite the ongoing uncertainty surrounding its potential sale. Funds under advice rose 9% to $21.5 billion, bolstered by equity market gains and new institutional client wins. Client satisfaction reached a record high, reflecting strong service delivery during a period of transition.

Balance Sheet and Dividend Highlights

Perpetual’s balance sheet showed increased borrowings, with gross debt reduced to $738.5 million, below the company’s target for the period. The gearing ratio improved slightly to 31%, supported by strong cash flow from operations. The company declared a final unfranked dividend of 54 cents per share, bringing total dividends for FY25 to 115 cents, consistent with its payout policy of 60% to 90% of UPAT.

Looking Ahead – Strategy and Priorities for FY26

Perpetual’s refreshed strategy focuses on simplifying the group, driving operational excellence, and investing for growth. Key priorities include completing the internal separation of divisions, continuing cost reduction efforts, and targeted investments in new products, particularly in Asset Management and Corporate Trust. The potential sale of the Wealth Management business remains a significant strategic focus, with the company aiming to strengthen its balance sheet and improve returns over time.