Platinum shares jump after better-than-expected profit
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The news: Shares in Platinum Asset Management have jumped after the troubled investment manager reported better-than-expected first-half profit and a revitalisation plan late on Thursday.
The numbers: Platinum said first-half profit was down 5% to $35.63 million, which was better than market estimates of around $34 million. Revenue for the half was down 2% to $99.78 million.
The result prompted Platinum shares to rise more than 14% to $1.18 in early trading on Friday.
The context: Platinum also announced a 12-month ‘reset and growth’ turnaround plan under which it plans to reduce costs, review existing product offerings and reorganise its investment platform.
The company recently appointed industry veteran Jeff Peters as its new CEO to replace co-founder Andrew Clifford. Platinum shares are down 45% over the last 12 months, having lost ground amid fund outflows in a competitive market.
What they said: Barrenjoey analysts said despite the board's turnaround plan it believed Platinum had a difficult path ahead to contain the decline in earnings and maintained its underweight rating.
Similarly, Goldman Sachs analysts said: "While we see the turnaround plan announced by the new Platinum CEO as positive, we await any initial observations around opportunities identified to improve performance/ profitability and processes".
"No targets have been announced yet. Right sizing the cost base is positive but we think improving distribution capability and positioning for growth may require investment. No mention was made of further capital management with organic/ inorganic opportunities to be explored," they said.
The source: ASX announcement
