The booming interest in socially and environmentally conscious investments has seen Australian Ethical post stellar half year results, despite the pandemic.
Australian Ethical reported underlying profit after tax for the second half of 2020 of $4.9 million, up 11%. Net profit after tax attributable to shareholders was up 17% to $5.2 million.
The company announced a fully franked interim dividend of three cents per share.
Funds under management grew by 30% during the period to $5.05 billion. Net inflows were at a record high of $422 million, up 43%. Customer numbers across investments and super increased by 22%.
Operating revenues increased by 10% to $25.6 million, but this was partially offset by superannuation fee reductions in the second half of last year, threshold reductions across some managed funds in October 2020 and the early release of super scheme. Operating costs also increased by 11%.
"In addition to reaching $5 billion in FUM - an audacious goal we set ourselves five years ago - our funds have delivered exceptional investment performance for our customers," chief executive John McMurdo said.
"And while in many ways the pandemic has reinforced our investment philosophy as Australians seek to do more with their money than just generate competitive financial returns, now is not a time to sit on our laurels."
He added that despite Australian Ethical's strong performance, the pandemic does still present its challenges.
"Like all fund managers Australian Ethical is highly leveraged to financial markets with volatility expected to continue into the second half of this financial year. However, we are in an enviable position with no debt, strong cashflows and positive momentum as Australians continue to open their eyes to the many benefits of ethical investing," McMurdo said.
"The second half of the financial year will be impacted by higher operating expenses, due to timing of expenditure, as well as increased investment in capability, strategic initiatives and regulatory projects as we continue to position our business for success. Looking forward, as part of our fee strategy, we will continue to reduce fees as we grow, to increase our competitiveness, and pass on benefits to our customers."
The fund manager also allocated $700,000 to the Australian Ethical Foundation, its charitable arm which distributes funds to not-for-profit organisations. This includes $100,000 in government stimulus the company received.