The Australian Ethical Investment Limited (ASX: AEF) share price will be on watch this morning after the fund manager released its FY20 report.
FY20 result
Australian Ethical reported that its revenue rose by 22% to $49.9 million. This was helped by total funds under management increasing by 19% to $4.05 billion. Net inflows doubled for the year to $660 million and customer numbers increased by 20%.
That revenue growth was achieved despite two separate fee reductions as the benefits of scale were passed onto customers.
The ethical fund manager generated a performance fee of $3.6 million from its Emerging Companies fund, up 350% from the FY19 performance fee of $0.8 million.
Management boasted that its super fund had a net promoter score (NPS) of +63 and its managed funds had a NPS of +58. This is among the best in the industry.
Underlying profit after tax (UPAT) went up by 42% to $9.3 million and statutory profit grew by 46% to $9.5 million.
Excluding the performance fee, revenue and UPAT both rose by 15% after 16% growth of expenses to $37 million.
Dividend
The board declared a final dividend of 2.5 cents, plus a 1 cent per share special dividend for its performance fee. That brings the total dividend to 6 cents per share, up 20%.
Summary
Management said that it’s highly leveraged to the market’s performance. So this period of uncertainty make things more difficult.
But the company boasted of being in a strong position heading into FY21 with no debt, strong cashflow and positive net inflow.
Australian Ethical’s share price has fallen significantly since the COVID-19 pandemic hit, so whilst its price/earnings ratio remains elevated, I think this is a good share price for Australian Ethical for a long term buy along with a quality portfolio of other ASX growth shares.
