Pinnacle shares rise on FUM and NPAT boost
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The news: Shares in Pinnacle Investment Management Group climbed in morning trade, after the fund manager boosted full-year funds under management (FUM) amid "significant volatility and complexity" during FY24.
The numbers: Pinnacle shares were up 3% to $16.95 by 11:30am AEST, having gained nearly 70% since the start of 2024.
Pinnacle boosted FUM by $18.2 billion, or 20%, to $110.1 billion from $91.9 billion a year earlier. This comprised net inflows of $9.9 billion and increases due to market movements and investment performance of $8.3 billion.
Retail FUM of $28.8 billion gained $6.1 billion, or 27%, while international FUM of $18.4 billion added $8 billion, or 77%, compared to June 2023.
The Sydney-based company recorded full-year NPAT of $90.4 million, up 18% compared to FY23. Diluted earnings per share were up 17% year on year to 45.4 cents.
However, expenses surged 36% from $36.4 million in FY23 to $49.4 million.
Pinnacle's board declared a final dividend per share of 26.4 cents, franked to 72%, up 29% from the fully franked FY23 final dividend of 20.4 cents. This took total dividends for the financial year to 42 cents, franked up to 82%, up 17% from the fully franked FY23 total dividends of 36 cents.
The context: Pinnacle said that during the year "macroeconomic and geopolitical events continued to cause uncertainty in the investment markets". Challenging conditions for generating new business persisted for much of the year, particularly in the Australian market, it noted.
Wilsons Advisory analysts said Pinnacle's result was "strong" as underlying NPAT and group FUM was ahead of consensus. The analysts are expecting improved group profitability in FY24 supported by smaller affiliates reaching scale and improved earnings diversification.
The analysts have an 'overweight' rating on the company with a target price of $14.10 which is under review.
What they said: Pinnacle's managing director Ian Macoun said: "Following the extremely challenging market conditions we faced in the second half of FY22 and across FY23, there was something of a recovery, at least in headline market returns, during FY24, as inflation began to stabilise and central bank rhetoric shifted toward base rates moderating (albeit leaving investors guessing as to the timing)".
"That headline picture, however, masked significant volatility and complexity within certain sectors," he said.
"As shareholders will be aware, we have sought to build a platform of Affiliates and investment strategies that enables us to be 'more relevant to more clients, more often' and have invested in our distribution and infrastructure capabilities meaningfully to allow us to make this broader range of products available to a wider range of clients and geographies.
The sources: ASX announcement, Wilsons Advisory research
