Adams consolidates control as Perpetual flags weaker markets
Perpetual chief executive Rob Adams has moved to consolidate control of the enlarged investment manager as he unveiled a “refreshed strategy” following its acquisition of rival Pendal.
The 137-year-old financial services firm reported a full-year underlying profit of $163.2 million that missed analyst forecasts as higher interest costs and equity-based remuneration weighed on weaker asset management revenue.
Perpetual CEO Rob Adams says the firm is “drawing breath”. Brook Mitchell
Perpetual shares fell 6.5 per cent to $23.31.
“The disappointment has been in our asset management business, and that was due to the net outflow profile over the course of the year,” Mr Adams told The Australian Financial Review.
On Thursday, Perpetual said Mr Adams’ leadership role would be expanded from group chief executive to also cover the asset management unit, which accounts for two-thirds of revenue and 50 per cent of profit.
That change resulted in the departure of foreign-based executives David Lane and Alexandra Altinger.
Perpetual, Mr Adams told analysts, was “drawing breath” after a frenzied period of corporate activity in which it acquired fund managers Pendal, Barrow Hanley and Trillium in addition to several smaller bolt-on deals.
But the deals have swung Perpetual from a strong net cash to net debt position, while its share count has increased by 40 per cent as investors wait for Mr Adams’ acquisitions to deliver results.
“I’m absolutely clear in saying that I’m disappointed in the flow profile that we’ve seen here. But the finishing line isn’t in sight yet,” Mr Adams said.
Several analysts quizzed Perpetual about its changed disclosure format, which consolidates asset management profits, making it harder to assess the
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