Platinum Asset Management Ltd (ASX: PTM) shares are catching the eye with a strong gain on Friday.
In morning trade, the ASX 300 share is up 15% to $1.19.
Why is this ASX 300 share shooting higher?
Investors have been buying the fund manager's shares today following the release of its half-year results after the market close on Thursday. The ASX 300 share reported the following:
- Funds under management (FUM) down 10.8% since 30 June to $15.4 million
- Revenue down 2% year on year to $99.78 million
- Profit after tax down 5% year on year to $35.6 million
- 6 cents per share fully franked interim dividend
Turnaround program
While the result itself wasn't overly impressive, the company made a separate announcement which appears to have given Platinum's shares a lift.
According to the release, the company's board has approved a broad-based turnaround program to revitalise its business. The program will be implemented in two separate phases over the short to medium term.
The first phase is the Reset phase, which focuses on aligning its expense base to current revenue conditions. It will also review current product offerings and distribution channels, as well as its investment platform and remuneration.
After which, the ASX 300 share will move onto its Growth phase. This includes implementing recommendations to enhance its investment platform and build improved product and distribution capabilities. It will also explore organic and inorganic growth and diversification opportunities.
Management commentary
Platinum's CEO, Jeff Peters, said:
I recognise that the market and competitive environments are difficult and that this affects us, our clients and our peers. It has been a difficult year so far at Platinum. We have seen net outflows, declines in revenue and our investment performance is not where we would like it to be for our clients. Change is necessary and, whilst we have a full agenda, I am confident we can get it done.
Broker sell rating
The ASX 300 share is rising today despite the team at Citi responding negatively to its updates.
Due partly to its underwhelming investment performance and the likelihood of more FUM outflows, the broker has retained its sell rating and $1.00 price target.
This implies potential downside of 16% for Platinum's shares over the next 12 months.
