Platinum Cancels Final Dividend After Massive Profit and FUM Decline
Platinum Asset Management reveals a sharp 86% drop in statutory net profit and a 39% plunge in funds under management for FY25, prompting a cancellation of the final dividend.
- Statutory net profit after tax falls 86% to $6.3 million
- Funds under management decline 39% to $7.9 billion
- Management fees drop 28% due to lower average FUM
- Turnaround program triggers $31.2 million non-cash charge
- No final dividend declared for FY25
A Challenging Year for Platinum Asset Management
Platinum Asset Management Limited (ASX, PTM) has reported a dramatic downturn in its financial performance for the year ended 30 June 2025. The asset manager’s statutory net profit after tax plunged 86.1% to just $6.3 million, a stark contrast to the $45.1 million recorded in the prior year. This sharp decline reflects a combination of significant market headwinds and internal restructuring costs.
Funds under management (FUM), a critical metric for any asset manager, fell by 39% to $7.9 billion from $13.0 billion a year earlier. This drop was primarily driven by net outflows of $5.6 billion, partially offset by positive investment returns of $0.6 billion. The average FUM for FY25 was $10.8 billion, down substantially from $15.3 billion in FY24, directly impacting management fee revenue.
Revenue and Expenses Under Pressure
Management fees declined 28% to $125.8 million, reflecting the reduced asset base. Despite this, adjusted expenses (excluding turnaround program costs) decreased by $20.6 million to $70.9 million, helped by lower employee compensation and reduced marketing and fund administration costs. However, these savings were overshadowed by a $31.2 million non-cash accounting charge related to the company’s turnaround program.
This charge included accelerated amortisation of share-based payments for employees who left during the year and the cancellation of the Platinum Partners Plan 2021 to 2023 grants, which failed to meet performance hurdles. Notably, the affected employees did not receive any benefit from these awards, highlighting the company’s stringent approach to performance management.
Margins and Dividend Impact
Adjusted earnings before interest and tax (EBIT) margins held up relatively well, declining only slightly from 48% to 44%, indicating some operational resilience despite the revenue pressure. However, statutory profit before tax dropped by $45.6 million to $27.6 million, with the turnaround program costs and a higher effective tax rate weighing heavily on the bottom line.
In light of these results, Platinum Asset Management’s board has decided not to pay a final dividend for FY25. This follows an interim dividend of 1.5 cents per share and a special dividend of 20 cents per share paid in December 2024. The cancellation signals a cautious stance as the company navigates through its restructuring and market challenges.
Looking Ahead
Net tangible assets per share also declined from $0.52 to $0.35, reflecting the overall financial strain. The company’s focus now turns to stabilising funds under management, controlling costs, and executing its turnaround strategy effectively. Investors will be watching closely for signs of recovery in upcoming quarterly updates and any strategic initiatives aimed at reversing the outflow trend.
Bottom Line?
Platinum’s FY25 results underscore the urgent need for strategic renewal amid shrinking assets and profits.
Questions in the middle?
- What specific strategies will Platinum implement to stem net outflows and rebuild FUM?
- How will the cancellation of performance grants affect employee morale and retention?
- What is the expected timeline for the turnaround program to positively impact profitability?
