Investors welcome move by Perpetual to shed loss-making interests
PERPETUAL received a tick from the market yesterday when it ended seven years of losses from its Dublin funds management business and sold off a super administration arm.
PERPETUAL received a tick from the market yesterday when it ended seven years of losses from its Dublin funds management business and sold off a super administration arm.Perpetual ended up 16? to $22.89 as investors embraced the move by the new chief executive, Chris Ryan, on two businesses seen as laggards within the fund manager.The sale of its Smartsuper superannuation administration business added an additional $4.1 million impairment charge, coming on top of the $10.6 million in impairment charges previously announced, which will be booked in the previous financial year.The sale of its underperforming Irish fund manager will book a $10 million impairment for the closure in the present financial year, although it will be offset by $7 million in annual savings.The funds will be transferred to US-based fund manager Wellington Management, but will continue to be offered through Perpetual.Perpetual also said it would continue to offer international equities to its investors through its global resources fund and a smaller Asian equities business."We are very committed to international equities as a Perpetual product," Mr Ryan said.He said the business had several options for delivering them.The company also forecast that its annual underlying profit after tax, ignoring what it described as one-offs, would be broadly in line with the previous guidance of about $73 million.However impairments offset by investment gains and write-backs in its exact market cash fund meant total net profit would fall to $62 million.Perpetual's move was welcomed by analysts, with Deutsche writing: "The closure of Perpetual's Dublin-based global equities business is a key positive in our view given this business failed to gain funds under management since acquiring the investment team in 2004 reflecting uninspiring investment performance."