The Motley Fool

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.

Juice your returns with 2 superstar small-cap stocks

Savvy investors are now seeking growth in smaller companies. Discover two stellar small-cap opportunities now, in our brand-new research report, “2 Small Cap Superstars” -- simply click here to download your FREE copy.

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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!