Perpetual positions for growth despite profit decline

Perpetual Private has been positioned for further growth, including acquisitions, despite Perpetual today reporting a 17 per cent decline in net profit after tax on the back of lower performance fees, net outflows and increased investment in strategic initiatives.

The company’s full-year results, announced to the Australian Securities Exchange, reflected what the chief executive and managing director, Rob Adams, described as a financial services industry experiencing significant disruption.

“Along with many of our peers, our business was impacted by market uncertainty and a challenging operating environment,” he said.

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At the same time, the company used an investor briefing to describe Perpetual as being “uniquely positioned to benefit from industry dislocation”.

It pointed to what it described as seismic shifts in the adviser landscape entailing significant regulatory change and large organisations exiting aligned advice models. Adams suggested that this fast-changing landscape presented opportunities in circumstances where clients were expecting personalised service from experienced and qualified advisers.

The company said its response had been the launch of industry leading professional services model and flagged the recruitment of five advisers in the first quarter of the current financial year and a further six in the second quarter.

Further, it said it had an active mergers and acquisitions pipeline for “bolt-on acquisitions that align to our model”.

On a business unit bases, the company reported that Perpetual Private’s profit before tax was 11.2 per cent lower at $41.2 million with the decrease largely due to increased investment in strategic initiatives to support future business growth.

Adams said that while the business had observed many players exiting the wealth industry, with financial advisers being displaced on a weekly basis, by contrast, Perpetual Private was well positioned to take advantage of the dislocation and had added five new quality advisers in the second half.

“We have transformed Perpetual Private’s client offer to provide holistic advice in a professional services model,” he said. “the new model provides greater transparency in structure and seamless access to clients to a team of experts to meet their advice needs.”

The company reported that Perpetual Investments profit before tax was $79.9 million which was 29 per cent lower than last year.

The board declared a fully-franked dividend of $2.50 per share.

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