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Pendal profit jumps on US acquisitions

Pendal Group released its 2021 results on Friday, noting that the strength of its diversified business model and the successful execution of its growth strategy helped the investment management services provider to deliver a strong performance.

Pendal said there has been heightened volatility in client sentiment and changes to investment strategy preferences. However, they made important strides during the year to take advantage of emerging opportunities and drive efficiencies. Investment in developing the company’s global distribution capability, optimising its operating platform and expanding its product offering, ultimately achieved a meaningful uplift in earnings and dividends.

The company reported that Statutory NPAT increased by 42% to $164.7 million, compared to the previous corresponding period (pcp), reflecting growth in fee revenue on increased funds under management (FUM) and favourable mark-to-market movements on the group’s seed investments.

Underlying profit after tax increased during the year to $165.3 million, up 25% compared to pcp, due to a substantial uplift in annuity income from base management fees, a four-fold increase in performance fees and the step-change in FUM as a result of its acquisition in July of Thompson, Siegel & Walmsley (TSW), a US-based value-oriented investment management company.

The acquisition of TSW more than doubled the group’s US FUM and is expected to deliver double-digit EPS accretion in the first full year post-completion. Pendal noted that it also creates a long-term opportunity to generate new FUM with the ability to bring both TSW and JOHCM investment strategies to clients through an expanded distribution network.

The board declared a final dividend of 24.0 cps, bringing total dividends for FY21 to 41.0 cps, an 11 per cent increase on FY20.

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