The Platinum Asset Management Ltd (ASX: PTM) share price will be one to watch on Wednesday.
This follows the release of the asset manager’s half year results after the market close.
How did Platinum perform in the first half?
The company was a positive performer during the first half, which could bode well for the Platinum share price tomorrow.
According to the release, for the six months ended 31 December, Platinum recorded an 8.5% increase in revenue to $166.6 million and a 14.4% lift in net profit to $90.4 million. Earnings per share came in at 15.6 cents.
Management advised that the main contributor of the increase in revenue, profit, and earnings per share was the mark to market gains on its seed investments, including dividends. These made an overall gain for the half year of $36.2 million before tax. This compares to a gain of just $7.7 million before tax in the prior corresponding period.
Also supporting its profit growth was a reduction in costs. Platinum’s total costs were $37.3 million for the half, which was down $3.3 million from a year earlier. This was achieved through cost savings on custody and registry fees, business development expenses, and legal, compliance, and other professional expenses.
In light of its profit growth, a fully franked interim dividend of 15.6 cents per share was declared. This represents 100% of its earnings per share. Management advised that this was possible due to its limited capital requirements. It continues to expect that that most, if not all, future profits will be distributed by way of dividends
Funds under management growth
At the end of the period, Platinum’s funds under management (FUM) stood at $23.6 billion. This represents an increase of 10.4% since the end of June.
Platinum’s FUM increase was driven by its investment performance, which contributed $3.3 billion to its FUMs. This more than offset the net fund outflows of $1 billion.
Positively, its investment returns were strong for all of its funds and mandates for the half year.
No guidance has been given for the full year, but management appears positive on its prospects.
It notes that the company is well positioned for future opportunities thanks to its highly differentiated product and strong position in the Australian retail market.
It also believes its offshore initiatives provide a platform for growth over the medium-term and notes that its investment team continue to deliver high research quality and a large idea base.
The Platinum share price is up 6.1% since the start of the year.