This morning international equities manager Pinnacle Investment Management Group Ltd (ASX: PNI) reported its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior corresponding period.
- Net profit from continuing operations of $30.5m, up 32%
- Earnings per share from continuing operations of 18.3c, up 28%
- Fully franked final dividend of 9.3cps, up 33% from 7.8cps
- Funds under management (FUM) of $54.3 billion (up 43%) at 30 June 2019 (includes $6.8 billion 'acquired' in July 2018)
- Net inflows of $1.5 billion over FY 2019
- $2.9 billion of the $6.5 billion net inflows for the year were retail, including $1.0 billion in LICs/LITs
- 94% of 5-Year affiliate (investment) strategies have outperformed at 30 June 2019
- Cash on hand of $51 million
This looks a strong all round result from Pinnacle as it has delivered a mix of organic and acquisitive growth underpinned by a strong six months to June 30 2019 for equity markets. However, it's worth noting equity markets have tanked this week.
In terms of FUM growth Pinnacle has now delivered a compound annual growth rate in FUM of 34.6% over the last 5 years and 28.5% over the last 10 years when including acquired FUM. The numbers (26.8% and 31%) are only marginally lower on an organic or inflows plus market appreciation basis when excluding acquired FUM.
On a rough day for the S&P/ ASX200 (ASX: XJO) which is down 2.8%, Pinnacle stock is up 4% as the $30.5 million profit is well ahead of analyst consensus expectations at $29.6 million, or Bell Potter at just $28.2 million.
Using conventional valuation metrics the stock at $4.04 trades on 22x trailing EPS from continuing operations with a 2.3% dividend yield plus full franking credits.
On first blush Pinnacle looks an impressive outfit, but I must admit to not being familiar enough with it to form an investment view.
A couple of other fundies boasting some investment grade characteristics that I covered briefly yesterday are Magellan Financial Group Ltd (ASX: MFG) and VGI Partners Limited (ASX: VG1).
