The Australian Ethical Investment Ltd (ASX: AEF) share price is roaring higher on Thursday morning.
In early trade, the fund manager's shares are up 9% to $3.52.
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Why is the Australian Ethical share price on the charge?
Investors have been bidding the Australian Ethical share price higher today following the release of a business update.
According to the release, the company's funds under management (FUM) reached a record $9.02 billion at the end of May.
This reflects further positive net flows of $90 million since March, despite the challenging economic and market environment that all investment managers are experiencing. It also notes that superannuation flows remained particularly resilient.
Australian Ethical's latest FUM represents an increase of 3% since 31 March 2023 and 45% since 30 June 2022. Though, the latter doesn't include the $1.93 billion in FUM that was added from the Christian Super acquisition that completed late last year.
Speaking of which, Australian Ethical's managing director, John McMurdo, spoke positively about both the acquisition and the state of play. He said:
The business is now better positioned than ever for further headline and earnings growth following the successful integration of the Christian Super successor funds transfer (SFT), and following positive investments' returns, and organic net cashflows.
In respect to the SFT, the company advised that it will now turn its focus to extracting further middle and back-office synergies.
Guidance
Also giving the Australian Ethical share price a boost today was the company's guidance for the second half of FY 2023.
Management revealed that revenue is expected to be approximately 21% higher than the first half driven by higher average FUM.
It will be the same for its second-half underlying profit after tax (UPAT), which is expected to be approximately 30% higher than the first half and in a range of $6.3 million to $6.8 million.
This will take its full year UPAT before performance fees to $11.3 million to $11.8 million. Management explained that stronger revenue and disciplined cost management have contributed to the emergence of operating leverage and the underlying profit increase.
