Global investment banking giant Macquarie Group (ASX:MQG) has posted a record interim profit of more than $1bn, a 58% increase on last year. Macquarie’s international operations accounted for 71 percent of total income.
Macquarie’s total profit for the half year was $A1,070m up 58% on 1H15 and up 16% on 2H15. The main contributors to the improved performance were favourable foreign exchange movements, higher performance fees and improved trading conditions in general. All operating group contributions were up on pcp. Earnings per share for the half year increased 53% to $A3.25
Operating income was 24% higher than pcp totalling $A5.3bn and assets under management increased to $A504bn. Macquarie Group declared an interim dividend of $A1.60 per share which is a 1.9% yield based on the last traded price of $84 per share.
Macquarie Group Managing Director and Chief Executive Officer Nicholas Moore said: “The six months to 30 September 2015 saw all operating groups deliver net profit contributions up on 1H15. While Macquarie continued to build on the strength of its Australian franchise, its international income accounted for 71 percent of the Group’s total income for 1H16. This reflects the growth of our international operations as well as the favourable impact of foreign exchange movements.”
Macquarie’s FY16 Outlook Remains Robust
Whilst strong results were widely expected by the market, investors were particularly interested in the outlook for the remainder of the financial year. Overall the Group expects FY16 results to be up on FY15, however the second half will likely be weaker than the first due to early recognition of additional performance fees.
The Group also notes that the short-term outlook is subject to a range of challenges such as market conditions, foreign exchange, ongoing costs and potential regulatory changes.
MQG has jumped nearly 45% so far this year to be one of the strongest performing blue-chip stocks.
Author: Simon Herrmann
Oct 30, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.