‘Robust position’: Magellan hikes dividend, posts profit swing

Magellan’s interim chief executive says the embattled Sydney fund manager remains in a robust financial position after reporting a half-year profit swing and dividend hike.

Magellan on Friday reported net profit after tax of $251.6 million for the six months to December 31, a 24 per cent increase on the prior period, and announced shareholders will receive an interim dividend of $1.10, compared to 97.1¢ last year.

Magellan unveiled a number of capital management initiatives including a bonus issue of options that interim chair Hamish McLennan said would be “attractive to shareholders”.Credit:Oscar Colman

Magellan has suffered a series of setbacks starting last December with the abrupt resignation of Brett Cairns, followed by the news earlier this month that founder and star investor Hamish Douglass was taking medical leave.

The turmoil followed a period of chronic under-performance of its flagship global equities fund and has caused its share price to dive.

But interim chief executive Kirsten Morton, who took over when Mr Cairns resigned suddenly last December, said the group had a robust balance sheet and strong margins would enable continued investment in the business.

Magellan founder Hamish Douglass is on medical leave.Credit:Janie Barrett

“Magellan has faced a number of challenges over recent months, however the Group remains in a robust financial position and has delivered strong financial results for the period,” she said.

“We are focused on our core funds management business and delivering upon our investment objectives for our clients.”

Alongside the results, Magellan unveiled a number of capital management initiatives including a bonus issue of options that interim chair Hamish McLennan said would be “attractive to shareholders”.

“While the business is in strong financial health, and a bonus issue of options is a potential source of value for shareholders, we know there is more work to do,” Mr McLennan said.

“I am very confident Magellan has the team and processes to overcome recent setbacks, and we remain extremely focused on improving outcomes for shareholders.”

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