PPT
Perpetual Limited
ASX
Third Quarter FY25 Business Update
Sentiment:
Quarterly Business Update
14 April 2025 6:55 PM
Perpetual Limited's third quarter FY25 business update reveals a 4% decrease in Asset Management AUM to approximately A$221 billion, alongside growth in Corporate Trust and Wealth Management FUA.
Worse than expected
Asset Management AUM decreased by 4% to approximately A$221 billion, indicating worse than expected performance in this segment.
Summary
- Perpetual Limited released its third quarter business update for the period ending 31 March 2025.
- Asset Management AUM decreased by 4% to approximately A$221 billion.
- The decline in AUM was primarily due to outflows in global and US equities and cash.
- Corporate Trust FUA grew by over 1% to reach A$1.26 trillion.
- Wealth Management delivered A$0.9 billion in net inflows.
- Perpetual is on track to deliver its targeted A$30 million in annualised cost savings by 30 June 2025, forming part of its broader Simplification Program to deliver A$70 A$80 million in annualised cost savings by 30 June 2027.
- FY25 expense growth is now expected to be between 3% and 4%.
Sentiment
Score: 6
Explanation: The sentiment is neutral to slightly positive. While there are negative aspects like AUM decline in Asset Management, the growth in Corporate Trust and Wealth Management, along with cost-saving initiatives, provide a balanced outlook.
Highlights
- Asset Management AUM decreased to approximately A$221 billion, a 4% drop.
- Corporate Trust FUA increased to A$1.26 trillion, a growth of over 1%.
- Wealth Management saw net inflows of A$0.9 billion.
- Perpetual is targeting A$30 million in annualised cost savings by 30 June 2025.
- The broader Simplification Program aims to deliver A$70 A$80 million in annualised cost savings by 30 June 2027.
- FY25 expense growth is revised to between 3% and 4%.
Positives
- Corporate Trust FUA grew by over 1% to A$1.26 trillion, with growth across all three divisions.
- Wealth Management achieved A$0.9 billion in net inflows, driven by a significant new client win.
- Perpetual is on track to deliver A$30 million in annualised cost savings by 30 June 2025.
- Pendal experienced net inflows of A$0.8 billion in Australian equities, excluding cash outflows.
- Fixed Income strategies experienced net inflows in Perpetual Asset Management.
Negatives
- Asset Management AUM decreased by 4% to approximately A$221 billion.
- Global and US equities and cash experienced outflows in Asset Management.
- JOHCM's AUM was down 4.4% due to net outflows of A$1.8 billion and negative market movements.
- Pendal's AUM was down 4.9% due to net outflows of A$1.7 billion, mainly in cash, and negative markets.
- Trillium's AUM was 9.2% lower due to negative markets, net outflows, and unfavourable currency movements.
- TSW's AUM was down 1.0% due to net outflows and currency impacts.
Risks
- The evolving macro-economic environment could impact sentiment towards equities investments.
- Volatile financial markets could affect Wealth Management performance.
- Currency movements can impact AUM and expenses.
- Outflows in specific strategies and regions could continue to affect AUM.
Future Outlook
Perpetual is focused on delivering its Simplification Program and managing expenses in light of market conditions.
Management Comments
- Our Asset Management business was impacted by outflows in the quarter, mainly in global and US equities and cash, due to a range of in net outflows in cash within our Pendal boutique, mainly due to the end of a previously announced, low-margin, short-term mandate won in 2024.
- Across our boutiques, we did not see any significant de-risking from clients in the period to 31 March and group investment performance was robust with 62% of strategies outperforming over three years.
- We are mindful of the evolving macro-economic environment post period end, and in particular, the impact of these external conditions on sentiment towards equities investments.
Industry Context
The report reflects broader industry trends of asset managers facing outflows in certain equity strategies due to macroeconomic uncertainty, while also highlighting the resilience of businesses with diversified offerings like Corporate Trust and Wealth Management.
Comparison to Industry Standards
- Comparing Perpetual's performance to global asset managers like BlackRock or Vanguard, the AUM decline is within an expected range given current market volatility.
- Firms with strong fixed income and private market offerings, such as Apollo Global Management, are likely experiencing more stable or positive flows compared to those heavily reliant on equities.
- Perpetual's Corporate Trust growth aligns with the increasing demand for structured finance and custodial services, similar to trends seen at State Street or BNY Mellon.
Stakeholder Impact
- Shareholders may be concerned about the AUM decline in Asset Management.
- Employees in Asset Management may face uncertainty due to outflows.
- Customers in Wealth Management benefit from net inflows and new client wins.
- Suppliers may see stable business from Corporate Trust and Wealth Management.
- Creditors should see no immediate impact as the company is managing expenses and generating positive flows in some segments.
Next Steps
- Continue implementing the Simplification Program to achieve cost savings.
- Monitor market conditions and adjust investment strategies accordingly.
- Focus on attracting and retaining clients in Wealth Management.
- Maintain growth momentum in Corporate Trust.
Key Dates
- 17 October 2024: First Quarter FY25 Business Update announced
- 31 December 2024: Half year period ending date for underlying profit before tax
- 31 March 2025: End of third quarter FY25, end of period for business update
- 30 June 2025: Target date for delivering A$30 million in annualised cost savings
- 30 June 2027: Target date for delivering A$70 A$80 million in annualised cost savings
Keywords
Asset Management, Corporate Trust, Wealth Management, AUM, FUA, Net Inflows, Outflows, Perpetual Limited, FY25, Simplification Program
PPT
Perpetual Limited
ASX
Sector: Financial Services
Filings with Classifications
Worse than expected
14 April 2025 6:55 PM
Quarterly Business Update
- Asset Management AUM decreased by 4% to approximately A$221 billion, indicating worse than expected performance in this segment.
Worse than expected
26 February 2025 4:57 PM
Half Yearly Report and Accounts
- The NPAT was significantly lower than previous periods due to significant items including impairment losses, indicating worse than expected results.
Worse than expected
26 February 2025 4:56 PM
Half Yearly Report and Accounts
- The net profit after tax attributable to equity holders of Perpetual Limited decreased to $12.0 million from $34.5 million year-over-year.
Delay expected
26 February 2025 4:56 PM
Half Yearly Report and Accounts
- The Scheme Implementation Deed with KKR for the sale of Wealth Management and Corporate Trust businesses was terminated after receiving unfavorable views from the ATO and an adverse report from the Independent Expert.
Worse than expected
26 February 2025 4:54 PM
Half Year Results
- The statutory NPAT decreased significantly due to significant items and an impairment in Asset Management, indicating worse than expected results.
Worse than expected
23 February 2025 5:35 PM
Company Update
- The termination of the Scheme of Arrangement with KKR is worse than expected as it represents a failed transaction and incurs significant transaction and separation costs.
Worse than expected
16 December 2024 4:59 PM
Transaction Update
- The Independent Expert's inability to support the deal due to potential tax liabilities is a worse outcome than expected.
Worse than expected
9 December 2024 4:40 PM
Scheme Update
- The potential for a A$488 million tax liability is significantly worse than expected.
- The ATO's position that the entire cash proceeds could be deemed an unfranked dividend is worse than expected.
- The uncertainty surrounding the transaction due to the ATO's stance is worse than expected.
Delay expected
9 December 2024 4:40 PM
Scheme Update
- The document indicates a delay in the finalisation of the transaction due to ongoing engagement with the ATO regarding the tax treatment.
Worse than expected
25 November 2024 1:17 AM
Shareholding Change Notice
- The reduction in Perpetual Limited's shareholding in Kina Securities Limited indicates a negative market sentiment or a strategic decision by the investor to divest from the company.
Worse than expected
21 November 2024 12:33 AM
Change of Substantial Holding Notice
- The decrease in Perpetual Limited's voting power in Healius Limited from 14.505% to 13.467% indicates a reduction in their stake, which is worse than maintaining or increasing their holding.
Worse than expected
18 November 2024 12:49 AM
Substantial Holder Notice
- The results were worse than expected because Perpetual Limited decreased its stake in Infomedia Limited, indicating a potential loss of confidence in the company's future prospects.
Worse than expected
17 October 2024 12:43 AM
Annual General Meeting Results
- The failure of the remuneration report and the election of a non-board endorsed director candidate represent worse-than-expected outcomes for Perpetual Limited.
Delay expected
16 October 2024 6:54 PM
Annual Report
- The timeline for the shareholder vote on the KKR scheme is subject to regulatory approvals and finalization of tax and duty discussions, potentially causing a delay from the initial target of early 2025.
Worse than expected
16 October 2024 6:54 PM
Annual Report
- Despite overall revenue and profit growth, significant net outflows from the Asset Management division were worse than anticipated, leading to a substantial impairment charge and impacting the final dividend.
Better than expected
16 October 2024 5:16 PM
Quarterly Business Update
- The 3% increase in AUM to A$222 billion exceeded expectations, driven by positive market movements and net inflows.
Delay expected
12 September 2024 6:43 PM
Sustainability Report
- The development of a cultural diversity target was paused due to the Strategic Review and potential separation of the Wealth Management and Corporate Trust businesses.
- Some community giving activities were paused due to reduced bandwidth resulting from the Strategic Review.
Worse than expected
12 September 2024 6:43 PM
Annual Report
- While UPAT increased, a significant non-cash impairment charge and other significant items resulted in a statutory net loss, indicating worse-than-expected results.
Delay expected
12 September 2024 6:35 PM
Annual General Meeting Notice
- The allocation of the LTI award to the new CEO is contingent upon the completion of the transaction, which could cause a delay in the award's allocation.
Worse than expected
12 September 2024 6:35 PM
Annual General Meeting Notice
- The statutory net loss after tax of A$472.2 million was significantly worse than expected due to substantial non-cash impairments and other significant items.
Worse than expected
23 July 2024 7:01 PM
Quarterly Business Update
- Asset Management AUM decreased by approximately 5% to A$215 billion, impacted by net outflows, market movements, and currency fluctuations.
Better than expected
7 May 2024 8:35 PM
Strategic Review Announcement
- The strategic review resulted in a cash offer that the board considers superior to other alternatives.
- The transaction unlocks significant value for shareholders through the sale of Wealth Management and Corporate Trust at attractive multiples.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.