Perpetual future performance uncertain

Perpetual TrusteesAustralia has reported a strong past six months with a 43 per cent increase in its operating profit for the half-year period to December 31, 2001, but has cautioned against further growth stating market conditions would continue to dominate in the future.

Perpetual’s net profit result for the six-month period was $39.5 million and according to Perpetual managing director Graham Bradley, if markets continue to perform well, then both the wealth management and corporate trust businesses should also achieve a good result for the last half of the year.

However, a negative change in market conditions could put a question mark on the ensuing six-month period’s performance.

“Our profits depend significantly however on the value of financial assets under management. Any serious market decline would affect our outlook adversely,” Bradley says.

The net profit results included the realised gains on the sale of investments, incorporating the sale of the fund services business to the Royal Bank of Canada.

The positive results were mainly attributed to a focus on the core business strengths in wealth management and corporate trust, as well as the strong performance of Perpetual’s investment team, particularly in Australian equities.

“Perpetual Investments continued its strong performance with total funds under management increasing from $15.6 billion at July 1, 2001 to $17.6 billion at December 31, 2001,” Bradley says.

By January this year, funds under management had increased to $18.2 billion.

While revenue for the six month period fell, Bradley says it reflected the sale of the fund services business, and the change in nature of the business of ASX Perpetual Registrars, which was deconsolidated last year and is now considered as an investment for the company.