Perpetual Limited

if we advise that today's conference is being recorded. I would now like to hand the call over to your host today, Ms Suzy Reinhart. Thank you.

Thank you, and good morning, everyone, and good afternoon or evening to those joining us from other parts of the world. Welcome to Perpetual's first half 25 results briefing. Before we begin today, we'd like to acknowledge the traditional owners and custodians of the land on which we present from today here in Sydney, the Gadigal people of the... and recognise their continuing connection to land, waters and community. We pay our respects to Australia's First Peoples and to their elders past and present. We would also like to extend our respect and welcome to any Aboriginal or Torres Strait Islander people who are listening in today. I acknowledge the traditional custodians of the various lands on which you all work today. Presenting for the first time is our new CEO and Managing Director, Bernard Riley, as well as Chris Green, Perpetual's Chief Financial Officer. There'll be an opportunity to ask questions at the end of the presentation. Please can we ask that we start with two questions each to ensure we have time for all analysts keen to ask questions. Before I hand over to Vern, we would like to draw your attention to the disclaimer on page two of the presentation. Vern, over to you.

Thanks, Susie. Good morning, everyone, or good evening, good afternoon, and thank you for joining us today for Perpetual Group's first half 25 results briefing. Before I cover the results, I wanted to address the announcement we made on Monday of this week. We announced that the scheme with KKR agreed in May 2024 had been terminated. Despite a period of extensive engagement, we were not able to reach agreement on a revised transaction to put to shareholders. While this was not where we expected to be, we have a course of action which I believe is the right path forward for shareholders. The board has decided to progress the sale of our wealth management business, a high quality financial advice business and we will continue the program to separate our businesses from one another so that they are more autonomous. Our results at a high level demonstrate growth across the business with robust growth in corporate trust and wealth management and continued growth in asset management which benefited from rising assets under management despite experiencing net outflows. Also today we announced an increase to the previously communicated simplification program from $25 to $35 million by 2026 announced in the 2024 results to $70 to $80 million to be delivered by the end of 2027. We have now announced a new strategy as well for asset management which we've already started to execute on. Turning to some of the headline numbers of our results. Total operating revenue was $686.2 million for the half, an increase of 4% on the first half of 2024. Underlying profit after tax was $100.5 million, 2% higher than the prior corresponding period. Statutory net profit after tax, or MPAT, was $12 million, 65% lower than first half 24 due to some one-offs, which we'll explain later in the presentation. Diluted earnings per share on UPAT was 89.2 cents per share, 5% higher than first half 24. The board has determined to pay an interim dividend of 61 cents per share, unfranked. Turning to the next slide. In remaining as a group, Today we have three quality businesses that have delivered growth in profit through a period of corporate uncertainty. In asset management, our globally diversified asset base provides us with a platform from which to drive scale benefits and an improved growth profile over time. Over the half, we delivered 7% growth in underlying profit before tax when compared to the first half of 2024. In corporate trust, despite the high interest rate environment, the business continued to deliver growth with underlying profit before tax up by 8% on the prior comparable period. In wealth management, the business saw solid performance across all segments, delivering 12% growth in underlying profit before tax compared to the first half of 2024. In summary, we have three quality businesses that have excellent organic growth opportunities ahead of them. We will continue our separation program and the end result will be a leaner central function, enabling greater autonomy and accountability. Turning to the next slide. And for more detail on our three businesses, firstly on asset management, as I said, underlying profit before tax was up 7% on the first half of 2024, underpinned by positive market movement and investment performance, with strong investment performance in certain funds leading to higher performance fees. Total assets under management at the 31st of December 2024 was $230.2 billion, an increase of 8% since the 31st of December 2023, supported by positive markets, currency movements and strong relative investment outperformance offset by net outflows, as you can see on the chart below. Net outflows for the year were 3.4 billion dollars, mainly driven by outflows in JL Hambro's larger global and international equity strategies, as well as Barrow Handley, which has continued to see outflows in US equity strategies. In Australia, we saw strong net flows in both the Pendle and Perpetual boutiques, which reported circa $2.9 billion in net inflows and $600 million in net inflows, respectively. Importantly, average revenue margins were stable through the period and investment performance was robust. Our focus on improving our net flows outcomes across the asset management business continues to be a focus and we'll cover that focus and other areas in the coming slides. At our AGM last year I set out four main priorities for the asset management business which I'll provide an update on today. These were confirming the future operating model, right sizing the cost base, resetting the distribution strategy, and stabilising JL Hambro. We've made a lot of progress in a short period of time, but there is more work to do. Turning to the operating model. We are moving to a model that better empowers the boutiques with operational autonomy in day-to-day decision making, but provides clear accountability for performance. We're aligning the enabling functions locally so that they can empower the boutiques and drive speed and accuracy of decisions. decisions will be made closer to the client. We are moving from a regional distribution model to a scaled international model, focused on high growth segments such as US and Europe intermediary. Turning to the next slide. As we transition to the new operating model, we will also bring efficiency benefits and reduce the cost base. Our simplification program has been uplifted from the original $25 to $35 million announced in August last year to $80 million in an annualised expense savings before tax over a three-year period. The program will be supported by disciplined cost and capital management practices across the group so that we have clear benefits for shareholders. The majority of savings will come from the asset management business and group functions. The main areas where we see reductions include the central functions by creating more autonomous business lines Centralised group support functions will be streamlined. The asset management boutiques, greater focus on the end-to-end profitability will drive a leaner and more efficient boutique business. Tech and operations, migration to our new registry platform and the implementation of middle office and back office program over the next two years will result in greater synergies. And finally, strategic partners and vendors. We're also exploring opportunities across our strategic partnerships and third-party vendors as well as product and platform rationalisation. We will provide a further update on that in due course. We have already achieved annualised cost savings of circa $10 million this half in excess of the original full year target of $7.5 to $10 million announced in August before I joined Perpetual. I would note though that these are annualised savings which will flow through the P&L in due course. Turning to the distribution strategy. We are resetting our distribution strategy so that we have the right capabilities in the right regions tapping into the right channels. We're increasing our international resources to enable us to launch new products into the right channels. This also means rebalancing resources from some regions into others. There's a growth opportunity for us in Asia in the institutional space where we currently have little presence. On the left, you will see our assets under management by channel, where we are heavily weighted to institutional investors. Our plan means we'll drive greater balance across clients and regions. As part of this, work has commenced on a holistic ETF strategy across relevant markets to target intermediary and retail channels. Turning now to JL Hambro. JL Hambro is a respected brand with high-quality investment teams and capabilities. It has all the necessary infrastructure required to attract and market capabilities on its platform. However, continued underperformance in some of the key global and international strategies is leading to outperformance. It will take time to revitalise the business. We are focused on three areas. We are resetting our distribution strategy to improve client engagement and better retain existing clients. We will prune to grow, which means closing down unprofitable strategies and reinvesting in growing capabilities. JL Hamburg has a great platform to add capabilities and we will explore new capabilities that add diversity of assets and clients in growth areas. And by platform, I mean an end-to-end business that has all the governance and back-office support to enable investment capabilities to do what they do best, manage money on behalf of clients. Revitalising the jail at Hambro, as I said, will take time. But I think we have all the right ingredients to be able to do so and we're seeing some early signs of improvement. Turning to the next slide. We have a new strategy for asset management. Some of this has already been covered, but this slide presents it more holistically. At the centre is our unique investment capabilities. We will be a leader in the global multi-boutique asset management business, combining institutional strength and global distribution with agility and specialisation of a boutique. This will enable us to continue to deliver superior services and support to our clients, empower our people, and our boutiques to deliver value to our shareholders over time. We have refreshed our asset management strategy to focus on transformation and growth based on three strategic imperatives, simplification, operational excellence and growth. We're moving to a new operating model which will deliver cost benefits. We will be leveraging our scale for the benefit of our boutiques. We will seek to embed greater autonomy and accountability in our businesses by introducing business performance targets for each boutique, as well as improving our speed and quality of decision-making with our new operating structure. Disciplined cost and capital management practices, along with the active management of our seed capital pool, will help us achieve the level of operational excellence that we're striving for. Our focus going forward is to unlock growth through a process of rebalancing our distribution and boutique level strategies towards growth areas. Along with this, we'll accelerate efforts in high growth areas where we already have a presence. With this strategy, I believe we can return a quality asset management business to growth. Now turning to corporate trust. A quick reminder for those who are less familiar with our business, our corporate trust business is a leading fiduciary and digital solutions provider in its sector. The business has continued to deliver strong earnings growth with a 10% CAGR over the last 10 years. It now has over $1.2 trillion in funds under administration across its debt market services and managed fund services divisions. It has strong client relationships as demonstrated by a very strong MPS of positive 54. And it continues to be a trustee of choice. It was recognised as trustee of the year for nine years straight. Turning to performance, corporate trusts delivered solid growth across each business line through the half, with underlying profit before tax increasing by 8% on the half and revenue up by 9%. In debt market services, growth in our securitisation portfolio from both new and existing clients contributed to 12% growth in revenue compared to the first half of 2024. In managed fund services, revenue grew by 7% on the prior comparable period, supported by continued market activity within fixed income and commercial property. Perpetual digital delivered 5% growth in the revenue over the half. Expenses overall grew by 9% due to technology spending and to support the growth in client volumes over the period, which impacted the cost-to-income ratio through the period, increasing slightly from 55% in the first half of 2024 to 56% in the first half of 2025. Turning to wealth management. Wealth management is one of Australia's leading advisory services businesses focused on the comprehensive needs of our clients. A strong reputation track record means that we remain a trusted service provider for private wealth, advice, trustee services, and non-profit and philanthropic services. The strength of our client relationships can be seen through our MTS result from the financial year 2024 of positive 48 and the business hitting a milestone of delivering 11 consecutive years of net inflows. Turning to the performance for the first half of 2025. In first half 2025, Wealth Management reported UPPT of $29.2 million, up 12% on the prior comparable period, driven by strong organic growth across all segments and the continued growth in funds under advice, which grew 8% over the period, driven by favourable market movements. Expenses increased by 5%, mainly to support organic growth initiatives and investment staff and technology. And importantly, the cost-to-income ratio reduced from 77%, to 75% over the period. I'll now hand over to Chris to talk through the detail of our results.