Magellan's revenue jumped by a third and its shares are rocketing higher

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  • Shares in Magellan are up by almost 15% after the company reported strong growth in funds under management.
  • Magellan has revised its dividend policy to set up a payout ratio of 90-95% of net profits .

Shares in listed fund manager Magellan Financial Group (MFG) are up by around 15% in afternoon trade after the company reported full-year results this morning.

Total revenue for the 2018 financial year rose by 34% to $452.6 million, while net operating profit climbed by 8% to $211.6 million.

The key driver of the result was a strong increase in funds under management.

Average funds under management were up 29% to $59 billion, giving rise to a 26% increase in management fees revenue, which rose to $385.8 million.

In February, Magellan purchased John Sevior’s Airlie Funds Management and another US-based fund manager in a combined deal worth $140 million.

Magellan also raised $1.57 billion by spinning off the Magellan Global Trust (MGG) in an initial public offering (IPO). One-off fees associated with the listing amounted to $55.7 million.

The listing of MGG resulted in a one-off return to MFG shareholders of 21.7%. Excluding the MGG sale costs and amortisation, group profit after tax rose by 37% to $268.9 million.

Magellan CEO Hamish Douglass highlighted the strength of its global equities business, which had $52.7 billion in funds under management at 30 June, 2018.

“I am extremely proud that, since Magellan was founded in 2006, $35 billion of value has been created for our clients and shareholders who have entrusted Magellan to manage money on their behalf,” Douglass said.

The company announced a final dividend of 90 cents per share, fully franked, and said it had revised its dividend policy to increase the payout ratio to between 90-95% of net profits after tax.

Magellan’s full-year results:

Source: Magellan Financial Group

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