Sydney, Australia – Share Price Rises Despite Lower Profit
Magellan Financial Group, an Australian fund manager, saw its shares rise by 14% early on Friday after the company announced a decline in its annual profit. The positive response from investors came as a result of the company’s operating costs coming in below guidance and the expectation of future cost benefits.
Net Profit Falls 52% for Fiscal Year 2023
For the 12 months ending on June 30, Magellan reported a net profit of A$182.7 million, representing a 52% decrease from the previous year. Although this was a 2% miss compared to consensus estimates, it was not unexpected according to Ord Minnett.
Dividend Declarations
In addition to the profit decline, Magellan declared a final dividend of 35.6 Australian cents per share, along with a performance-fee dividend of 4.2 Australian cents per share. The company also announced a special dividend of 30.0 Australian cents per share. It is worth noting that last year’s final dividend was 68.9 Australian cents per share.
Positive Outlook for Fiscal Year 2024
Magellan provided fiscal year 2024 guidance on fund-management operating costs, expecting them to range between A$95 million and A$100 million. This is a decrease from the fiscal 2023 operating costs of A$121.3 million, which came in below the previously guided range of A$125 million to A$130 million.
“We have remained vigilant in managing our costs and capital…We anticipate further cost benefits from changes made to flow through in FY 2024 and onwards,” stated Chief Executive David George.
Strong Performance Year-to-Date
Despite the decline in net profit, Magellan’s shares have performed well so far this year, showing an increase of around 17%.
