Magellan, a fund manager, excited investors despite lower profits due to a drop in funds under management. The company plans to control costs, provide a special dividend to shareholders, and improve its investment team to rebuild its funds under management to $100 billion within five years.
Magellan’s CEO, David George, expressed confidence in achieving the $100 billion goal. Despite skepticism from analysts, the company’s new chairman, Andrew Formica, believes they can deliver on this plan.
The company reported a 52% decline in net profits to $182.7 million for the year to June. Funds under management fell almost by half due to a challenging period. Magellan also announced a special dividend of 30c a share and noted an improvement in its flagship global fund’s performance.
Shares, which had fallen significantly, rose by 13.6% to $10.45. Despite the difficulties, Magellan’s CEO, David George, who was appointed last year, is steering the company’s turnaround efforts.
Magellan closed the financial year with $39.7 billion in funds under management, down from $61.3 billion in the previous year. Their global equities fund, which accounts for over half of their funds, saw outflows slow in the second half as its performance improved.
Magellan’s focus on cost control surprised the market, as operating costs for funds management were lower than expected. The company aims to reduce costs further and strengthen its performance to achieve its ambitious fund management target.