Australian Ethical Reports $19.9M Net Profit, $13.94B Funds Under Management
Australian Ethical Investment Limited reported a robust 68% rise in net profit after tax and a 34% increase in funds under management for FY25, driven by strong organic growth and the Altius acquisition. The company declared a fully franked final dividend of 9 cents per share, underscoring confidence in its growth trajectory.
- Net profit after tax attributable to shareholders up 68% to $19.9 million
- Funds under management grew 34% to $13.94 billion, boosted by Altius acquisition
- Underlying profit after tax increased 29%, with improved operating leverage
- Final dividend declared at 9 cents per share, fully franked
- Strategic initiatives include platform transitions and expanded investment capabilities
Strong Financial Performance Amid Market Volatility
Australian Ethical Investment Limited (ASX, AEF) has reported a standout financial year for the period ending 30 June 2025, with net profit after tax attributable to shareholders soaring 68% to $19.9 million. Revenues climbed 19% to $119.4 million, underpinned by a 34% surge in funds under management (FUM) to $13.94 billion. This growth was fueled by a combination of strong organic inflows, robust investment performance, and the strategic acquisition of Altius Asset Management.
Strategic Growth and Operational Enhancements
The acquisition of Altius in September 2024 added $1.93 billion in FUM and expanded Australian Ethical’s fixed income capabilities, aligning with its ethical investment mandate. Alongside this, the company successfully transitioned its superannuation administration services to GROW Inc and custody services to State Street Australia Limited, modernizing its operating platform. These initiatives contributed to improved operating leverage, with the cost-to-income ratio improving from 73.7% to 71.4%.
Dividend and Shareholder Returns
Reflecting its strong earnings growth and disciplined capital management, Australian Ethical declared a fully franked final dividend of 9 cents per share, up from 6 cents the previous year. Total dividends for FY25 rose 56% to 14 cents per share. The company also delivered a three-year total shareholder return of 47%, signaling sustained value creation for investors.
Ethical Investing and Industry Recognition
Australian Ethical continues to lead in ethical investment, maintaining its status as a Responsible Investment Leader by the Responsible Investment Association Australasia. Its superannuation products garnered multiple awards, including Sustainable Fund of the Year by Super Review and SuperRatings. The firm committed a record $2.8 million to its philanthropic arm, the Australian Ethical Foundation, supporting climate and nature-positive initiatives.
Executive Remuneration and Governance
Executive remuneration remained aligned with company performance, with short-term incentives awarded based on a balanced scorecard of financial and non-financial metrics. Notably, no Executive Long-Term Incentive (ELTI) awards vested in FY25 due to unmet performance hurdles, reflecting the company’s rigorous performance standards. The Board welcomed new directors with deep industry experience to support its growth ambitions.
Outlook and Future Initiatives
Looking ahead, Australian Ethical plans to complete the transition of remaining superannuation members to GROW Inc, further invest in technology and data analytics, and expand its product suite including fixed income, private markets, and potentially active international equities. While mindful of ongoing geopolitical and market uncertainties, the company remains confident in its strategy to scale impact, deepen customer value, and sustain profitable growth.
Bottom Line?
Australian Ethical’s FY25 results underscore its successful blend of ethical investing and commercial growth, setting the stage for continued expansion amid evolving market dynamics.
Questions in the middle?
- How will the full integration of Altius impact future revenue margins and operating costs?
- What are the company’s plans to address competitive fee pressures in the superannuation market?
- How will ongoing geopolitical and economic uncertainties influence Australian Ethical’s growth trajectory?
