The Platinum Asset Management Ltd (ASX: PTM) share price will be one to watch on Monday.
After the market close on Friday the fund manager released its half year results.
How did Platinum perform in the first half?
For the six months ended December 31, Platinum delivered a 15.5% increase in revenue to $153.6 million.
Things were even better on the bottom line, with the company reporting a 21.4% increase in profit after tax to $79.1 million. Earnings per share came in 13.6 cents.
Whilst this is undoubtedly strong bottom line growth, it is worth noting that the key driver of its growth was the mark to market gains on its seed investments.
During the half these investments made an overall gain of $7.7 million. This compares to a loss of $19.1 million in the prior corresponding period.
This offset a reasonably weak six months for funds under management (FUM). At the end of the period, Platinum's FUM stood at $25.1 billion. This was an increase of 1.4% on its closing FUM of $24.8 billion at the end of June.
However, this increase in FUM was driven by its investment performance, which contributed $1.6 billion. This offset the net fund outflows of $1.3 billion it experienced over the period.
Management blamed the net fund outflows on the time lag effect of its weak relative investment performance in FY 2019, which was caused by the late cycle bull market, particularly in the United States. It notes that its investment returns for all of its funds and mandates for the half year were strong.
Due to its profit growth being largely due to seed investments gains, the Platinum board has only maintained its interim dividend. It will pay shareholders a fully franked 13 cents per share dividend on March 18. Its shares will trade ex-dividend for this on March 3.
