Magellan shares rally as it announces AUM uptick and special dividend
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More news: Magellan Financial Group shares rallied at market open as the company announced an increase in assets under management and a special dividend.
Its shares were up 6.5% to $11:30 by 10:14am AEST and over the last 12 months has risen 11%.
During an investor call chief executive Sophia Rahmani said it was "really pleasing" to see AUM growth after a challenging few years.
"FY25 did show an uptick [in AUM], as you can see through the numbers. We've got some of our investment teams in growth. Some of them continue to be in slight outflow, and it was well supported by investment performance overall," Rahmani said.
"From a client perspective, [we] can see the stabilisation message coming through... some of our institutional clients want to spend less time on the corporate side and cut straight through into the investment teams and [find out] what our portfolio managers are doing and thinking of markets, which, in my experience, is always a really good sign that clients are wanting to talk to us about what we want to talk about as well."
Rahmani noted that while superannuation fund internalisation and political instability continued, Magellan would continue to see client opportunities and partnerships as long as it could continue to provide alpha.
Magellan Financial Group net profit and performance fees tumble
The news: Magellan Financial Group has posted a 31% decrease in net profit after tax for FY25 but has also announced a special dividend of 21 cents.
The numbers: The financial services group posted a net profit after tax of $165.02 million, compared to $238.76 million during the prior year. Analysts were expecting $159 million, according to Visible Alpha data.
Magellan’s assets under management stood at $39.6 billion over the year to 30 June 2025, an 8.2% increase from FY24.
Total revenue was down 16% to $318.95 million, while performance fees were down 42% to $11.1 million.
Investment management revenue was down 12% to $245.7 million due to a reduction in average management fee to 61 basis points and lower performance fees
The board declared a final dividend of 25.9 cents per share, along with a special dividend of 21 cents, fully franked, bringing the full year dividend to 73.3 cents, up from 65.1 cents during FY24.
Magellan said the special dividend reflected the “material increase in non-investment management earnings, the Group’s strong capital position and aligns with the new FY26 dividend policy of paying at least 80% of Group operating profit”.
The context: Magellan chair Andrew Formica said the board had adopted a revised dividend policy for FY26 onwards as it targets at least 80% of group operating profit.
Magellan has been plagued with outflows over the past few years as it has suffered investment underperformance and departures from several senior management figures. Its current funds under management is a fraction of the $113.9 billion it held in FY21.
Earlier this year, its long-serving head of investments and infrastructure lead Gerald Stack left the business and portfolio Nikki Thomas stepped down from managing the Magellan Global Equities fund and the Magellan Global Fund to focus exclusively on managing the Magellan High Conviction Strategy.
What they said: Magellan chief executive and managing director Sophia Rahmani said: “FY25 was a year of momentum and renewal… With operating profit growing 5.4% to $159.7 million and assets under management increasing by 8.2% to $39.6 billion, we are seeing the benefits of strategic diversification and improved investment performance across all our capabilities”.
The source: ASX
