Macquarie Group (MQG) is expecting a small improvement in net earnings for the year to March 31, that hasn’t come as a result of the return of volatility to financial markets.
Macquarie told the ASX yesterday that it now expects its full-year 2015 results to be “slightly up” on last year’s $1.27 billion, thanks to an improved performance from its funds division.
Macquarie’s rules off its interim accounts September 30, so the update points to good news in that announcement in about six weeks’ time.
In fact the statement yesterday said that due to the timing of transactions its interim results would be up 25% to 30% on the previous corresponding period, but lower than the latter six months of its financial year.
That is subject to performance reviews and period end reviews, the statement said.
In the update to the ASX the bank said the funds management unit would lift its earnings in 2015 thanks to “increased performance fees from the listed and unlisted funds”.
“Given the increased contribution expected from MFG, we now expect the FY15 result for the group to be slightly up on FY14,” the statement said.
The news saw the shares rise 1% to $58.55, which wasn’t a bad outcome given the gloom and doom in the wider market yesterday.
MQG YTD – Macquarie sees better FY15
Macquarie has about $405 billion in assets under management, much of that in the US and denominated in US dollars.
The funds unit includes Macquarie Infrastructure and Real Assets and Macquarie Investment Management.
Analyst estimates suggest the group will report a full-year profit of $1.35 billion, still shy of its 2008 result of $1.8 billion.
Macquarie’s update yesterday was better than the one given at the annual meeting in July, when chief executive Nicholas Moore said Macquarie anticipated a result from the funds division broadly in line with 2014, subject to performance fees.
Macquarie said yesterday that the “short term outlook remains subject to a range of challenges” including market conditions, the strong Australian dollar, and “potential regulatory changes and tax uncertainties”.
The bank said the outlook for its other five operating units was unchanged from that outlined at the group’s AGM.
