Perpetual (ASX:PPT) reported revenue and underlying profit growth in its half-year 2026 market briefing, with management highlighting progress on cost reduction and strategic initiatives, continued momentum in Corporate Trust, and ongoing uncertainty around the proposed sale of the Wealth Management business.
Group earnings and dividend
Chief Executive Officer and Managing Director Bernard Reilly said the group delivered “a solid result,” with both revenue growth and underlying profit growth in the half.
The board declared an interim dividend of AUD 0.59 per share, unfranked, payable on 7 April 2026. CFO Suzanne Evans said the interim dividend represented a 60% UPAT payout ratio for the half, down from 70% in the prior corresponding period, and noted dividends were expected to remain unfranked in the second half.
Cost actions and simplification program
Management emphasized “disciplined cost management” and ongoing simplification efforts. Reilly said the group had delivered AUD 60 million in annualized savings to date and remained on track for AUD 70 million to AUD 80 million in annualized savings by FY2027.
Evans said AUD 26.9 million of savings were reflected in first-half results, with most savings coming from workforce efficiencies, ongoing rightsizing, and removing duplication. The company incurred AUD 4.4 million in additional costs to achieve these savings during the half, recorded as significant items. Total costs to achieve the program were expected to remain around AUD 55 million.
Perpetual also reduced FY2026 expense guidance to 1% to 2% growth from 2% to 3%. During Q&A, Evans said foreign exchange was a “big swing factor,” but added that controllable costs and simplification benefits contributed to confidence in the tightened guidance range.
Asset Management: performance, flows, and product development
Reilly said Asset Management earnings growth was supported by improved market conditions and cost management, partially offset by currency and net outflows, particularly in global, international, and U.S. equity strategies. He said the multi-boutique model provided diversification, with 54% of strategies outperforming over three years.
For the half, the company reported AUD 22 billion of gross inflows and AUD 32 billion of gross outflows, resulting in AUD 10 billion of net outflows. Reilly said emerging markets and Australian equities saw inflows, while fixed income had a strong half, which he said demonstrated the benefits of diversification.
Evans said Asset Management underlying profit before tax increased 4% to AUD 106.9 million. Higher average AUM lifted management fees, while performance fees were slightly lower. Asset Management expenses declined 2%, reflecting early simplification benefits, partly offset by foreign currency movements and continued investment in fund technology upgrades.
On distribution, Reilly highlighted a unified Australian distribution platform with AUD 71 billion of AUM across Australia, including AUD 32 billion in the wholesale channel and AUD 25 billion in the institutional channel, plus AUD 14 billion in the cash channel. Wholesale delivered AUD 1.5 billion in net inflows during the half, while the institutional channel saw outflows but included several wins, including:
- AUD 250 million from a super client into Australian equities
- AUD 110 million into J O Hambro’s emerging markets capability
- AUD 100 million new multi-asset mandate from a large superannuation client
Management pointed to product launches aimed at evolving distribution channels, particularly fixed income. Reilly said the Perpetual Diversified Income Active ETF held more than AUD 215 million in AUM as of 31 December, and the Perpetual Credit Income Trust raised AUD 268 million, taking assets to more than AUD 800 million. He also highlighted the launch of Barrow Hanley’s US Mid Cap Value Equity Fund into the U.K., which reached over AUD 165 million (US$110 million) by the end of December 2025.
Reilly said Perpetual decided to enter the U.S. active ETF market using a third-party multi-series trust structure, citing lower cost and faster time to market. He also said discussions with Partners Group had advanced, with an early-stage product design being introduced to test market interest.
During Q&A, Reilly acknowledged ongoing net outflows in J O Hambro’s “select strategies,” citing soft performance as a challenge, but noted other J O Hambro global and emerging market strategies were receiving inflows. Evans added that asset management revenue margin dynamics reflected both outflows and changes in asset mix, including inflows into fixed income strategies and improvement in some Barrow strategies.
Corporate Trust strength and Wealth Management sale uncertainty
Reilly said Corporate Trust delivered another strong half with growth across all three segments, supported by robust securitization markets and client growth. He noted the business was named KangaNews Australian Trustee of the Year for the 10th consecutive year. Evans said Corporate Trust revenue rose 10%, with Digital Market Services revenue up 20% partly due to implementation fees for Perpetual Intelligence SaaS offerings and growth in markets and fixed income platform solutions.
Wealth Management remained a focus amid the sale process. Reilly said discussions with Bain Capital had progressed and documentation was underway, but he reiterated there was “no certainty” a binding agreement would be reached or that a transaction would proceed. Evans said Wealth Management revenue was broadly flat at AUD 118.8 million, while expenses rose 6%, driving a AUD 5.5 million decline in underlying profit before tax. Funds under advice increased 6% to AUD 21.9 billion.
In Q&A, Reilly said the sale process had taken longer due to the complexity of “untangling” a 139-year-old business intertwined with other parts of the group, including Corporate Trust. He declined to comment on media speculation around the brand, noting only that brand had been an important consideration in the sale process.
Another investor asked about costs associated with the Wealth Management separation. Management said a significant portion related to separation work, including technology and technical separation activities, and said it was keeping a close eye on spending. Evans also said Perpetual had reviewed how it classified significant items and was working toward “more discipline” and clearer reporting by the full-year results.
On cash and balance sheet items, Evans reported free cash flow of AUD 33.8 million, total cash of AUD 325.6 million at 31 December 2025, and said Perpetual had AUD 150 million of surplus liquid funds available, largely related to undrawn lines of credit. She also described seed capital as a selective, actively recycled tool for organic growth and product development, overseen by a formal committee, with an average holding period of around three years.
About Perpetual (ASX:PPT)
Perpetual Limited is a publicly owned investment manager. The firm offers a range of financial products and services in Australia. The company provides funds management, portfolio management, financial planning, trustee, responsible entity and compliance services, executor services, investment administration and custody services, and mortgage processing services. It offers investment capabilities across a range of asset classes, including Australian and global equities, mortgages, cash and fixed interest, and Australian listed property.
