Half-yearly Results to December 2001 by lindahy


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									Half-yearly Results to December 2001
Report to Shareholders
Charles Curran AO, Chairman
Graham Bradley, Managing Director

     We are pleased to announce good results achieved       In the December half-year, total group revenues
     by the Perpetual group in the half-year to             were $118.5 million, compared to $141.7 million
     31 December 2001, to advise an increase in our         for the same period last year. Revenues were
     interim dividend, and to report briefly on the         lower due to the change in status of ASX
     performance and outlook for the company.               Perpetual Registrars (APRL) to associate (so that
                                                            its revenues and expenses are no longer included
     Financial results                                      in group figures) and the sale of the Fund Services
     The profit after tax attributable to the members       business. These changes were offset in part by
     of the company, before realised gains from the         growing revenues in our wealth management and
     sale of investments and before the profit on the       corporate trust businesses.
     sale of Perpetual’s Fund Services business, was
     $25.9 million compared to $19.2 million for the        Dividends
     same period last year—an increase of 35 percent. In
                                                            The board has declared an interim dividend of
     a period characterised by turbulence and uncertainty
                                                            50 cents per share fully franked. This represents an
     in global markets, compounded by the tragic events
     of 11 September 2001, this result continues our        increase of almost 43 percent over last year’s
     track record over recent years of increasing           interim dividend (35 cents per share). This interim
     half-yearly profits. Earnings before interest, tax,    dividend is in line with our record over recent
     depreciation and amortisation (EBITDA) rose to         years of steadily increasing our dividend to
     $46.9 million, compared to $40.7 million for the       shareholders.
     same period last year—an increase of 15 percent.
                                                            In view of the company’s continued strong cash
     The sale of Perpetual’s Fund Services business to      position, the board has decided not to reopen the
     Royal Bank of Canada was finalised on 31 July          dividend reinvestment and bonus share plans at
     2001. This transaction resulted in a capital gain of   this time.
     $14.8 million after tax. Net realised gains from the
     sale of this and other investments during the half-    We will now briefly comment on each of our
     year were $13.6 million. As a result, the group’s      business operations, starting with our wealth
     net profit for the half-year was $39.5 million,        management businesses—Perpetual Investments
     compared to $27.4 million for the half year            and Personal Financial Services—which together
     to 30 June 2001, an increase of 44 percent,            generated revenues of $91.9 million for the
     representing basic earnings of 105 cents per           period, and an EBITDA of $42.7 million before
     share for the period.                                  unallocated corporate and support costs.

     Perpetual Trustees Australia Limited
     ABN 86 000 431 827
         Perpetual Investments                                   Total funds managed for our private clients,
         Perpetual Investments’ revenues for the half-year       trusts, estates and charitable foundations totalled
         were $60.0 million, compared to $49.9 million in        $5.2 billion at 31 December. This compared to
         the corresponding period last year, an increase of      $5.0 billion at 1 July 2001. We have made good
         20 percent.                                             progress in attracting clients to our portfolio
                                                                 management service. During the half-year, some
         The highlight of the period was the continuing          190 new clients entrusted $185 million to our care.
         strong investment returns achieved by our
         investment management team, especially in our           In late 2001, we issued our first public offer
         Australian equity funds. This helped maintain           prospectus for Perpetual’s Select Investment Fund,
         support for our funds from financial planners and       our multi-manager private client fund. This service
         investors, despite difficult conditions in equity       is offered via our private client advisers to clients,
                                                                 co-trustees and the wider retail market.
         markets. Perpetual was recently named Morningstar
         Fund manager of the Year 2001—the second                Continued progress was made during the half-year
         consecutive year we have won this coveted award.        in strengthening our staff expertise and operational
                                                                 systems in DIY superannuation, portfolio
         Our proven investment approach continues to
                                                                 management and back office administration areas.
         serve our clients well in the face of volatile
                                                                 In January 2002, we sold our half interest in
         markets. For example, our flagship Industrial
                                                                 Investor Security Group in order to focus our
         Share Fund delivered a return of 14.9 percent
                                                                 efforts on growing our presence in the financial
         (pre-fees) for the 12 months to 31 December
                                                                 advisory market under the Perpetual brand.
         2001, compared to the return of 9.5 percent for
         the S&P ASX 300 Industrials Accumulation Index
                                                                 Corporate Trust
         during the same period.
                                                                 This division continued to grow well during the
         New fund inflows slowed markedly during late            period with revenues of $17.5 million, up from
         September and October, but returned to budgeted         $14.4 million in the corresponding period last year,
         levels during November and December. Perpetual          an increase of 22 percent. The division’s EBITDA
         Investments’ total funds under management grew          before unallocated corporate and support costs was
         from $15.6 billion at 1 July 2001 to $17.6 billion at   $8.3 million, up from $6.8 million in the period to
         31 December 2001. Retail and mastertrust funds          31 December 2000.
         rose from $9.9 billion to $11.7 billion.
                                                                 Our securitisation trustee business has continued its
         At 31 January 2002, our funds under management          strong growth. 2001 was a record year for
         had increased to $18.2 billion.                         residential mortgage backed securitisation programs
                                                                 in Australia, and we won a number of significant
         Personal Financial Services                             new mandates, notably commercial mortgage
                                                                 backed programs from new securitisation clients
         Our private client and superannuation businesses
                                                                 including Mirvac, AMP Henderson, Investa,
         together generated revenues of $31.9 million for
                                                                 Australand, and ING. At 31 December 2001 we
         the half-year to 31 December, compared to
                                                                 had some $46 billion in assets under securitisation,
         $29.3 million for the corresponding period last
                                                                 increasing from $42.2 billion at 1 July 2001.
         year. This reflects private client revenues of
         $22.3 million (up from $20.2 million) and               We continue to see a growing interest in our
         superannuation revenues of $9.6 million (up from        fiduciary and other support services to the debt
         $9.1 million).                                          capital markets and property markets, and we

Page 2
expect steady growth in this area of business.          The OSCAR system represents a large investment
Our Responsible Entity service is also receiving        to create a modern, efficient and internet-friendly
increasing interest as specialist managers seek to      registry system. Moving forward, the new system
outsource regulatory compliance management and          will enable APRL to compete more effectively, to
agent monitoring functions.                             become the leader in service innovation for its
                                                        clients, and to operate more profitably. To this
ASX Perpetual Registrars (APRL)                         end, we and our shareholder partner, Australian
                                                        Stock Exchange, plan to make further investments
During the past 6 months, APRL achieved a major
                                                        to improve the features and functionality of the
milestone: the successful implementation of its
                                                        OSCAR system.
new, proprietary Online Shareholder Communi-
cations and Registry System—OSCAR. The
system went live in late September, and APRL
successfully migrated its 180 registry clients to the   We start 2002 with equity markets around the
new system by 16 December, its target completion        world at high levels after a bumpy period over
date. This involved over 8 million shareholder          recent months. If markets continue to perform well,
records and over 116 million account records—a          we expect our wealth management businesses to
                                                        achieve a good result for the balance of 2001-2002.
significant achievement and the culmination of an
                                                        Our profits depend significantly, however, on the
18 month system development effort.
                                                        value of financial assets under our management and
APRL greatly appreciates the strong support             administration, so any serious decline in market
given by its clients during the development and         conditions affects our outlook adversely.
implementation of the new system. Following the
                                                        In these circumstances, we continue to manage
migration of its clients to OSCAR, APRL no
                                                        our costs carefully while continuing to invest in
longer relies on Computershare for any services to
                                                        our systems, in our staff and in growing awareness
support its share registry operations.
                                                        of the Perpetual brand.
Despite the huge effort associated with this project,
                                                        In closing, we wish to thank all of Perpetual’s staff
it is pleasing to report improved profit results for
                                                        for their hard work and commitment over the past
the half-year. Our share of APRL’s profits was
                                                        half-year. Their dedicated contribution has been
$0.2 million, an unsatisfactory result but a good
                                                        critical to our pleasing result and positive outlook.
improvement on the prior full-year result when
we recorded a loss of $1.97 million.

During the past six months, APRL completed
major corporate actions for NRMA Insurance,             Charles Curran AO
Mayne Nickless, Burns Philp and QBE Insurance,          Chairman
amongst other assignments. We are also pleased to
report that APRL’s contract with Telstra was
renewed for a minimum of 3 years from
December 2001. With 2.1 million shareholders,
Telstra’s register is the largest in Australia.         Graham Bradley
Following the successful introduction of the            Managing Director
OSCAR system, Qantas has announced that it will
transfer its register to APRL in February 2002.         Dated: 26 February 2002

                                                                                                                Page 3
              Half-year performance
              June 1997 to December 2001

                                                                 12-01    06-01    12-00     06-00    12-99    06-99      12-98    06-98     12-97     06-97
                                                                   $m       $m       $m        $m       $m       $m         $m       $m        $m        $m
              Operating revenue                                  114.6    144.0   137.1      121.5    117.4    104.4       93.7     70.3        58.9   58.6
              Investment income                                    3.9      4.6      4.6       3.6      2.7      2.3        2.8        3.1       2.6    3.1
              Total revenues                                     118.5    148.6   141.7      125.1    120.1    106.7       96.5     73.4        61.5   61.7
              Operating expenses                                  71.6    107.3   101.0       85.6     88.2     73.2       69.4     52.3        42.3   44.2
              Earnings before Interest, Tax,
              Depreciation & Amortisation (EBITDA)                46.9     41.3    40.7       39.5     31.9     33.5       27.1     21.1        19.2   17.5
              Depreciation and amortisation                        5.5      7.5      6.7       6.8      6.1      4.4        4.3        3.5       3.1    3.1
              Goodwill amortisation                                1.9      3.2      2.7       2.2      2.5      2.5        1.2        0.2       0.5    0.3
              Interest expense                                     1.6      1.8      1.9       2.0      2.1      2.1        1.5         –         –       –
              Share of net losses of associates                   (0.1)     0.1      0.2       0.3        –        –          –         –         –       –
              Profit before tax and realised
              gains on investments                                38.0     28.7    29.2       28.2     21.2     24.5       20.1     17.4        15.6   14.1
              Tax expenses                                        12.1      9.0    10.1        9.8      8.3      9.4        6.3        4.5       4.7    4.3
              Profit after tax and before
              realised gains on investments                       25.9     19.7    19.1       18.4     12.9     15.1       13.8     12.9        10.9    9.8
              Outside equity interests in profit                     –      1.8      0.1      (0.3)    (0.3)    (0.3)         –         –         –       –
              Net profit attributable to
              members before realised gains                       25.9     21.5    19.2       18.1     12.6     14.8       13.8     12.9        10.9    9.8
              Net realised gains on investments                   13.6      5.9      8.3       5.2      4.4      1.8        0.3     (0.2)        1.5      –
              Net profit attributable to
              members of the company                              39.5     27.4    27.5       23.3     17.0     16.6       14.1     12.7        12.4    9.8
              Basic EPS (cents)                                  104.9     73.1    74.3       63.6     46.5     46.1       40.8     36.9        35.6   28.1
              Dividends per share (cents)                         50.0     50.0    35.0       35.0     30.0     34.0       26.0     29.0        22.0   25.0

                                  Australian Capital Territory              South Australia                             Western Australia
                                  Level 4                                   Perpetual House                             89 St Georges Terrace
                                  10 Rudd Street                            89 King William Street                      Perth WA 6000
                                  Canberra ACT 2601                         Adelaide SA 5000                            08 9322 6011
                                  02 6248 7977                              08 8239 4400
                                                                                                                        ASX Perpetual Registrars Limited
                                  New South Wales                           Victoria                                    Level 8
                                  39 Hunter Street                          Level 28                                    580 George Street
                                  Sydney NSW 2000                           360 Collins Street                          Sydney NSW 2000
                                  02 9229 9000                              Melbourne VIC 3000                          02 8280 7100
                                                                            03 8628 0400
                                  Queensland                                                                            Level 4
                                  Level 10                                  87 High Street                              333 Collins Street
                                  Riverside Centre                          Kew VIC 3101                                Melbourne VIC 3000
                                  123 Eagle Street                          03 9853 3355                                03 9205 4800
                                  Brisbane QLD 4000
                                  07 3834 5656

                                  123 Margaret Street
                                  Toowoomba QLD 4350
                                  07 4632 1355                                                                          www.perpetual.com.au

P0633 02-02

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