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Results: Pinnacle Investments shares lift 4% on consensus beat

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).

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Motley Fool contributor Tom Richardson owns shares of Magellan Financial Group.

You can find Tom on Twitter @tommyr345

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 Scott Phillips.

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