Australian Ethical share price jumps 6% on strong FY24 half-year result

The Australian Ethical Investment Ltd (ASX: AEF) share price is up 6% after reporting strong profit growth in the FY24 first-half result.

It opened 1.4% higher at $4.95 and it’s currently trading at $5.21.

Australian Ethical share price rises on exciting profit growth

• Revenue increased 33% to $47.5 million
• Funds under management (FUM) rose 15% to $9.67 billion at 31 December 2023
• Average FUM rose 37%
• Underlying net profit after tax (NPAT) grew 71% to $8.5 million
• Statutory NPAT grew from $5.2 million to $6.2 million
• Interim dividend per share up 50% to 3 cents per share

The company saw its funded customer number increase 13% to more than 130,000, while superannuation members increased by 16%.

Net inflows amounted to $259 million, an increase of 39% compared to the prior period. This was supported by superannuation net inflows of $269 million.

The company said its continued positive net inflows during challenging market conditions demonstrates the “resilience” of its business.

The investment performance added $0.2 billion to its FUM over the period.

What else happened in the FY24 first half?

Australian Ethical launched three investment products. The Infrastructure Debt Fund was launched, as well as two multi-asset products, being ‘moderate’ and ‘conservative’ funds.

The fund manager pointed out that the business operating leverage is improving. The underlying cost-to-income ratio for the period was 75%, an improvement from the FY23 first half of 81%. Increasing profitability can help give investors more confidence about paying more for the Australian Ethical share price.

What did Australian Ethical management say?

The Australian Ethical CEO John McMurdo said:

Our growth strategy is gathering momentum and we are seeing an uplift in our key financial metrics as well as strong momentum on key strategic initiatives. We are proud of the way we operate our purpose-driven business and were delighted that many aspects of our business – customer experience, growth, governance, investment philosophy as well as investment excellence – were all recognised by awards and accolades during the period.

What’s next for Australian Ethical?

The business is targeting $100 million of annualised revenue by the end of FY24. It generated $47.5 million in revenue in the first half of FY24.

It said its larger scale will allow the business to invest for growth while also delivering profit for shareholders. It’s planning to invest in technology and data analytics, as well as the customer experience.

The company revealed it’s considering a pipeline of ‘inorganic’ opportunities.

Australian Ethical share price snapshot

In the last six months, Australian Ethical shares have risen by 27%, compared to a 7% rise for the S&P/ASX 200 Index (ASX: XJO).

The post Australian Ethical share price jumps 6% on strong FY24 half-year result appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment. The Motley Fool Australia has recommended Australian Ethical Investment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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