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Here’s why BT Investment Management Ltd soared 7%

Investors reacted positively to the full year profit result announcement by the Westpac Banking Corp (ASX: WBC) aligned fund manager and financial service provider BT Investment Management Ltd (ASX: BTT)  yesterday, sending the share price up 7.4% to finish the trading session at $11.35 which marked a record all-time closing high.

The stock has now gained a massive 88.5% in the past 12 months, putting the performance well ahead of peer IOOF Holdings Limited (ASX: IFL) which has returned 2.5% and the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) which is down 5%.

Result Highlights

  • BT delivered a record result with a cash net profit after tax of $132.5 million, equating to 44 cents per share (cps)
  • Dividends grew 6% to 37 cps
  • The group reported a 28% rise in base management fees
  • Net inflows of $5.7 billion were recorded taking total funds under management (FUM) to $78.4 billion
  • Investment performance across BT’s funds was strong with 97% of FUM exceeding respective benchmarks over three years and 99% exceeding benchmark over five years.

Outlook

While no specific guidance was given, management noted that the current FUM level is higher than the average level across the past financial year; that investment performance remained strong with a number of funds producing strong outperformance and performance fees currently accrued of $85.1 million; and that good FUM momentum had continued into the current year.

With the stock trading on a historic price-to-earnings ratio and dividend yield of around 25.8x and 3.2%, arguably the current share price of $11.35 accurately reflects the positive performance and outlook for the group.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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