Perpetual Limited reported a resilient FY25 with a slight dip in underlying profit, offset by strong asset growth and progress on its Simplification Program and Wealth Management sale.
- Underlying profit after tax down 1% to $204.1 million
- Asset Management AUM up 5% to $226.8 billion with flat profit
- Corporate Trust profit up 7%, Funds Under Administration grew 5%
- Wealth Management FUA rose 9%, profit declined 5% amid ownership uncertainty
- Statutory loss of $58.2 million due to $134.6 million impairments and strategic costs
Steady Financial Performance Despite Market Challenges
Perpetual Limited’s FY25 results reveal a company balancing resilience with transformation amid a volatile market backdrop. The group posted an underlying profit after tax (UPAT) of $204.1 million, a marginal 1% decline from the previous year, reflecting mixed performances across its core divisions and the lingering effects of corporate uncertainty.
Asset Management, the largest contributor, saw its assets under management (AUM) climb 5% to $226.8 billion, buoyed by stronger equity markets and currency movements. However, net outflows of $16.2 billion and challenges in value-style strategies tempered profit growth, resulting in a flat underlying profit before tax (UPBT) of $200.9 million. Notably, Perpetual is accelerating efforts to revitalize its J O Hambro boutique, which faced significant impairments and outflows.
Growth in Corporate Trust and Wealth Management Faces Headwinds
Corporate Trust delivered a solid performance with a 7% increase in UPBT to $90.9 million and a 5% rise in Funds Under Administration (FUA) to $1.27 trillion. This growth was driven by robust activity in securitisation, trust management, and digital services, highlighting the division’s steady momentum.
Meanwhile, Wealth Management’s Funds Under Advice (FUA) grew 9% to $21.5 billion, supported by new institutional client wins and improved markets. Yet, profit declined 5% to $51.5 million, impacted by ownership uncertainties and higher operating costs, including investments in staff and technology.
Strategic Initiatives and Simplification Drive Future Focus
The group recorded a statutory loss after tax of $58.2 million, primarily due to $134.6 million in non-cash impairments related to goodwill and customer contracts, especially within J O Hambro, alongside costs from strategic initiatives such as the terminated KKR transaction and ongoing Simplification Program.
Perpetual’s Simplification Program exceeded its FY25 target, delivering $44 million in annualised cost savings against a goal of $30 million, with a broader target of $70-$80 million by FY27. This program aims to streamline operations and reduce costs, supporting the company’s refreshed strategy focused on simplification, operational excellence, and growth investment.
Gross debt was reduced to $738.5 million, falling below the company’s target range, strengthening the balance sheet ahead of the proposed sale of the Wealth Management business, which continues to progress.
Looking Ahead
CEO Bernard Reilly emphasized the company’s commitment to becoming a more focused and efficient financial services group, aiming to enhance client outcomes and shareholder returns. The internal separation of Perpetual’s three businesses is advancing, positioning each for greater autonomy and growth potential.
While the statutory loss and impairments highlight ongoing challenges, the company’s strategic initiatives and cost discipline suggest a path toward renewed growth and value creation in the coming years.
Bottom Line?
Perpetual’s FY25 results underscore a pivotal year of transformation, setting the stage for renewed growth amid ongoing strategic execution.
Questions in the middle?
- How will the proposed sale of Wealth Management impact Perpetual’s future earnings and strategy?
- What specific measures will drive the revitalization of the J O Hambro boutique?
- Can the Simplification Program sustain momentum and deliver the targeted $70-$80 million in savings by FY27?