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Earnings season: Magellan share price climbs higher after positive annual report

asx shares higher

The Magellan Financial Group Ltd (ASX: MFG) share price went up more than 2.5% today after the company released its annual report for the year to 30 June 2020.

What was in the annual report?

Magellan had a revenue of $693.95 million in the year to 30 June 2020 – a 12.4% increase on the 2019 financial year.

The company posted a net profit after tax of $396.21 million, up 5% on 2019. 

Adjusted net profit after tax was $438.3 million, which excluded the amortisation of intangible assets and after tax transaction costs related to strategic initiatives. This was a 20% increase on adjusted net profit after tax in the 2019 financial year.

Earnings per share were 218.3 cents for the 2020 financial year. Magellan’s average funds under management were up 26% to $95.5 billion in the year to 30 June 2020.

The company declared a dividend for the 6 months to 30 June of 122.0 cents, taking total dividends for the year to 214.9 cents per share.

What does Magellan do?

Magellan Financial Group is a funds management company that operates listed and unlisted managed funds. It was founded in 2006 and has offices in Australia, New Zealand and the USA.

In June 2020, Magellan launched the Airlie Australian Share Fund (ASX: AASF), an ETF that typically invests in between 15 and 35 Australian equities. This is one of several listed funds managed by Magellan.

In a letter to shareholders, Magellan CEO Brett Cairns commented on the group’s results, stating;

 “During the year, the group saw a 26% growth in average FUM (funds under management) over the previous corresponding period, to $95.5 billion (average FUM of $75.8 billion for the year ended 30 June 2019).

“We are pleased with this outcome, particularly given the severe market volatility seen around the world driven by the COVID-19 pandemic. This could not have been achieved without the performance of our investment strategies which exhibited the strong downside protection traits that are a key component of our investment objectives.”

About the Magellan share price

The Magellan share price was up 2.7% to $63.35 at the time of writing, more than double its 52-week low of $30.10 in April. The share price is up 5.47% since this time last year.

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