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BT Investment Management Ltd reports profit soared 137% in past 12 months: Should you buy?

Operating on a fiscal calendar closer to the banks than the majority of companies on the ASX, BT Investment Management Ltd (ASX: BTT) released its 2014 full-year report to the market just this morning.

The results were nothing short of breathtaking for a company with a $1.7 billion market cap, with profit more than doubling on last year’s result.

However some might say that the year’s performance does little more than bring the company’s valuation closer to reality, with BTT now trading on a price to earnings equation of 15 (down from around 30) after 2014’s superb results.

Here are some of the highlights:

  • Statutory NPAT up 137% to $127m (from $61.9m in FY13)
  • Cash NPAT up 105% to $121.5m (from $51.2m)
  • Fee revenue up 62% to $420.7m (from $260.4m)
  • Base management fees up 36% to $289.7m (from $212.4m)
  • Performance fees up 180% to $121.8m (from $43.5m)
  • Closing funds under management at Sept 30 up 14% to $66.4 billion

The performance of performance fees (pun intended) was particularly outstanding, although the company’s profit margin on its base management fees also improved by 11%.

BT’s entrance into the US market has also been promising, with the company netting $1.1 billion in funds under management in the twelve months to September 30.

New products, solid investment returns and fair performance fees are likely to be key to the company continuing to increase its investment pools in FY15, although I consider it highly unlikely if not impossible for the company to replicate this year’s performance.

Instead shareholders are likely to see more moderate rises in funds under management and corresponding fee income as BT’s overseas projects continue to bear fruit.

Performance income also depends in part on the performance of the markets BT invests in, and as such continued growth in this sector should not be counted on.

So you’re looking for performance AND income?  Look no further…

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Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.

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