Perpetual Limited

Perpetual reported first-half operating revenue of $697.9 million, up 2% year over year. Underlying profit after tax was $112.7 million, up 12%, and diluted EPS on NPAT was $0.971, up 9%; statutory NPAT was $53.9 million. Total expenses were $547.8 million, within prior FY26 guidance, and FY26 expense growth guidance was reduced to 1% to 2% from 2% to 3%. The interim dividend was $0.59 per share, unfranked, with a 60% UPAT payout ratio; cash at 31 December 2025 was $325.6 million and free cash flow was $33.8 million. Looking ahead, management said the simplification program remains targeted to deliver $70 million to $80 million of annualized savings by June 2027, after $60 million delivered to date.

Bernard Reilly framed the half as a solid period with revenue and profit growth plus “good progress” on strategic objectives. He emphasized a multi-boutique model, stronger distribution, new product launches, ETF expansion, and continued investment in Corporate Trust and AI-enabled workflows. His tone was constructive but cautious on wealth: he said the sale process is complex, there is no certainty of a binding deal with Bain, and the business must be untangled carefully to protect shareholders, clients, and staff.

Suzanne Evans focused on the financial execution: operating revenue of $697.9 million, UPAT of $112.7 million, expenses of $547.8 million, and significant items of $58.8 million that were mostly non-cash. She said controllable cost growth was 1%, the effective tax rate on UPBT was 24.9% and should normalize around 27% to 28%, and free cash flow was $33.8 million with total cash of $325.6 million after $60.3 million of dividends. She also highlighted $150 million of surplus liquid funds, the continued use of seed capital, and the expectation that total costs to achieve simplification remain about $55 million.

Analysts pressed management on the slow pace and complexity of the Wealth Management sale, including brand treatment and the $14 million spent in the half on separation and transaction-related work. Reilly said the process is taking longer because Perpetual is separating a business that has been intertwined with the group for decades, and Evans said stranded costs should be relatively immaterial but that sale-specific cost estimates are not yet ready. Questions also focused on expense guidance, with Evans confirming FX was a major swing factor and saying the tighter 1% to 2% range reflects both vigilance on costs and simplification benefits. On J O Hambro, Reilly acknowledged select-strategy outflows are still being driven by soft performance, while noting inflows elsewhere in global and emerging markets; he also said the U.S. active ETF push is intended to improve distribution speed and reduce execution risk.