Australian Ethical (ASX: AEF) revenues up 38%, UPAT up 12%, FUM up 38%

Written by PR Newswire

SYDNEY, Feb. 23, 2022 /PRNewswire/ -- Australia's original responsible investment and super fund manager Australian Ethical ^[1] has announced ^[2] a 38 per cent jump in half-year operating revenue to $35.2 million compared to the 6 months ended 31 Dec 2020.

Underlying profit after tax (UPAT) was up 12 per cent to $5.4 million, driven by strong customer growth and net flows, and solid investment performance.

Net inflows rose 42 per cent, contributing to funds under management (FUM) growth of 38 per cent up to $6.94 billion as at 31 December 2021.

Managed fund flows (excluding institutional) experienced strong growth at 129 per cent, following increased traction with both advisers and direct investors.

Superannuation net flows increased by 45 per cent, driven predominantly by direct channel growth.

Australian Ethical's customer base also grew 22 per cent since 31 December 2020, with managed fund customers increasing 32 per cent and super members growing by 20 per cent.

John McMurdo, CEO and MD of Australian Ethical, said: "Australian Ethical has seen continuing strong momentum as growing numbers of Australians choose to invest in line with their values.

John McMurdo, CEO and MD of Australian Ethical

"It's also clear that Australians are not being fooled by companies or fund managers that only pay lip service to ethical practices. While the majority of the mainstream investment market now claims to be investing responsibly or following principles of ESG, it is clear that the most ESG capital is flowing to leading fund managers with a longer track record of ethical investment.

"As Australia's original and leading ethical investor, we are well-positioned to capture a significant share of this rapidly growing market.

"We are also mindful that current volatility is likely to continue. Even with restrictions easing, the sweeping impact of Omicron shows that sentiment around the pandemic can still shift quickly, while inflationary pressures and political tensions are a front-of-mind concern for investors. And while we remain well-positioned to benefit from regulatory, policy, market, and investor tailwinds, any outlook is subject to economic and market conditions.

"We remain focused on implementing our long-term strategic roadmap to capture the significant opportunities amid growing demand from retail and institutional investors for quality ethical investing solutions.

"This confidence in our ability to succeed comes from the quality of our people, our ethical investing pedigree, and our financial strength."

Australian Ethical continues to invest in its high-growth strategy, as outlined in the FY21 full year results. Key investments include strategic hires, brand and marketing campaigns, technology initiatives, new product launches, and M&A due diligence costs.

In 2021, Australian Ethical launched one of Australia's first ethical multi-asset high-growth funds, and an actively-managed High Conviction Domestic Equities Fund which it listed as an ETF on the newly launched Cboe Australian exchange in February 2022.

As part of its long-standing commitment to donate 10% of after-tax profits to the Australian Ethical Foundation, to support the mission of unearthing and funding the most effective charities and solutions addressing climate change, Australian Ethical allocated $0.7 million in this period; with a total of more than $6 million donated since inception.

The Foundation announced the recipients of its first Visionary Grants program, a public grant round targeted at funding early-stage innovative climate solutions, as well as funding Australia's first extensive research into the most impactful climate change charities, and launching Australia's first evidence-based climate action giving guide through Giving Green.

Financial highlights

Underlying profit after tax (UPAT) of $5.4 million (up 12%)
Net profit after tax (NPAT) attributable to shareholders of $5.4 million (up 5%)
Operating revenues of $35.2 million (up 38%)
Interim dividend of 3 cents per share, fully franked
Diluted EPS 3-year CAGR of 24%, based on NPAT attributable to shareholders
Strong balance sheet, no gearing, well managed operating cash flow

Operating highlights

FUM was $6.9 billion on 31 December 2021, up 38%
Average FUM, the primary driver of revenue, increased 47%
Net inflows of $0.6 billion (up 42%)
Customer numbers up 22% from 31 December 2020
$0.7 million provisioned for the Australian Ethical Foundation

All comparisons are to the 6 months ended 31 December 2020.

For more information, please visit: www.australianethical.com.au ^[3] | ASX Announcement here ^[4]

Australian Ethical (www.australianethical.com.au ^[5]) is Australia's original responsible investment and fastest-growing super fund manager, with a 35-year track record, over $6.5 billion in Funds Under Management (FUM), and above-market returns in its premium products.

Australian Ethical offers 9 managed funds and 13 investment options in its superannuation fund. These are managed by an in-house team of investment professionals consisting of sector specialists with an average of over 16 years of experience, and an internal ethics team with a separate reporting line. Every decision made by both teams is guided by the Australian Ethical Charter and its responsible investment philosophy. The investment team combines the most comprehensive ethical assessment process in the market with fundamental bottom-up stock analysis that goes far deeper than generic ESG investing.

Australian Ethical is rated as one of the top-performing super funds and investment managers by Super Ratings, Chant West, Morningstar, Money Magazine, Rainmaker, Forbes, and Financial Standard.