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Australian Ethical records $10.4bn FUM amid strong super flows
Australian Ethical is maintaining its FUM hot streak as it seeks to grow the business.
In its full-year financial statement for the year ended 30 June, Australian Ethical reported 13 per cent growth in funds under management (FUM) to a record $10.4 billion.
The growth, it said in an ASX listing on Thursday, was driven by a combination of continued positive net flows, including record superannuation guarantee and year-end contributions, coupled with positive investment performance.
Underlying profit after tax (UPAT) for the firm climbed 57 per cent to $18.5 million and statutory net profit after tax (NPAT) attributable to shareholders saw an increase of 80 per cent over the financial year 2023 to $11.8 million.
Australian Ethical highlighted that in FY24, operating revenue increased 24 per cent to a record $100.5 million. This, it said, was achieved through further growth in its customer numbers – which now exceed 134,000 – alongside the full-year positive impact of the Christian Super Successor Fund Transfer (SFT) undertaken in the prior year.
It clarified that the Christian Super acquisition added some $1.9 billion to Australian Ethical’s overall FUM.
Inflows over the 12-month period, the firm said, were some $6 million for managed funds and $600 million for superannuation, which saw managed fund FUM reach $2.2 billion and superannuation FUM reach $8.3 billion over the period.
According to the firm, managed fund net flows reflected “cautious” investor sentiment during volatile market conditions.
“These results demonstrate that maintaining our focus on sustainable growth and improving our offer to customers, is delivering positive outcomes for our shareholders,” John McMurdo, Australian Ethical CEO, said on Thursday.
“Over the last five years we have been focused on investing for the next stage of our growth. This investment in our business has enabled us to increase profitability and provides a platform to capture the sizable growth opportunity that lies ahead.”
Moreover, expenses increased by 16 per cent, largely driven by increased variable costs as the business grows, according to the ethical fund manager.
“The results for FY24 include the full year impact of the Christian Super SFT and we are pleased to announce the acquisition of the Altius Asset Management business in May which we expect to complete by end of September 2024,” McMurdo said.
“This acquisition will add a further approximately $2 billion of FUM, while expanding our sustainable fixed income capability with six new investment team employees.”
Looking ahead, McMurdo said that Australian Ethical is set up for future growth.
“While remaining cognisant of market conditions, we remain confident of the medium-term market opportunity, which is supported with the structural macro themes of compulsory Australian Superannuation and ethical investing,” he said.
“We believe FY25 will be the start of the next stage of our growth story, as we continue to optimise organic and explore inorganic opportunities, with our stronger business capability.”
The board declared a fully franked final dividend of 6¢ per share for FY24, bringing the full-year dividend to 9 cents.
AUTHOR
Jessica Penny
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