Perpetual Limited — Earnings Release 2004

Aug 23, 2004

MEDIA RELEASE

Perpetual's strong increase in profit and shareholder distributions outlines growth strategy

• Operating profit up 29%, good growth across all businesses
• Capital review releases surplus capital via an additional special $2.00 dividend
• Future dividend payout ratio increased to 90% of Perpetual's underlying profit
• Implementing new strategy focused on three strategic priorities
• Growth in FY05 operating earnings in excess of 10%, subject to investment market conditions

Perpetual Trustees Australia Limited ('Perpetual') today announced an increase in after tax operating profit of 29 percent to $88.2 million for the year ending 30 June 2004. This result exceeded the forecast of a minimum 25 percent increase advised to shareholders in May.

The group's net profit after tax and gains on sale of investments increased by 16 percent to $90.4 million for the year to 30 June 2004, compared to $78.2 million in the previous year.

Total operating revenues in 2004 were $306.0 million representing an increase of 10 percent over last year, with costs being maintained at the same level as the previous year. Earnings before interest, tax, depreciation and amortisation (EBITDA), increased by 26 percent from $113.6 million to $143.6 million.

The board has declared an increased final dividend of 80 cents per share fully franked at 30 percent, payable on 17 September 2004 (record date: 2 September 2004), up from 70 cents last year. This brings total dividends in respect of the 2004 financial year to $2.00 per share ($1.80 in 2003), an increase of 11 percent.

Perpetual's Chairman. Mr Charles Curran, said that the board has reviewed Perpetual's capital management policy and will return surplus capital to shareholders by way of an additional special dividend. The group will distribute $76.5 million ($2.00 per share) of surplus capital by paying a fully franked special dividend on 17 September 2004 (record date: 2 September 2004).

"The board has determined that Perpetual's dividend policy in the future should be set at a 90 percent pay-out ratio of Perpetual's underlying profit, which is our net profit after tax before goodwill amortisation and before gains or losses on investments and will be fully franked.

"The board believes that this approach will provide significant benefits to shareholders, while providing for regulatory capital requirements, establishing an appropriate contingency margin over these requirements and allowing for organic growth initiatives," Mr Curran said.

Perpetual's Managing Director, Mr David Deverall said that the strong result was underpinned by the strength of Perpetual's core businesses in Wealth Management and Corporate Trust, the improved profitability of ASX Perpetual Registrars Limited, positive financial markets and improved investor confidence.

"Highlights for the year include the successful integration of the Personal Financial Services and Perpetual Investments businesses to create our Wealth Management division. Funds under management increased from $17.4 billion last year to $21.7 billion at 30 June 2004 and funds under advice and administration increased from $6.0 million last vear to $6.6 billion at 30 June 2004" Mr Deverall said.

"Our Corporate Trust division had another strong year with total securitisation funds under administration increasing from $87.1 billion at 30 June 2003 to $112.4 billion at 30 June 2004. Revenues in our securitisation business increased by 18 percent and we are continuing to invest in this area of our business.

Mr Deverall said that Perpetual's new strategy, announced to the market today, was focused on three strategic priorities - to develop a more balanced portfolio, create new sources of growth for the group and to fully engage its team to deliver on the strategy.

"The initiatives commenced to develop a more balanced portfolio include the restructure of our advice business to improve customer service and profitability, the continued focus on cost management, the expansion of our range of funds management products and the participation in consolidation in the trust industry.

"To develop future growth engines, we are expanding our capabilities into new asset classes. For example, we recently announced the addition of a strong fixed income capability in Wealth Management. In our Corporate Trust division, we are developing additional processing services for the lending and securitisation market." Mr Deverall said.

"We have also implemented a range of activities to fully engage the Perpetual team in our new strategy. In particular we have created a new performance and remuneration system which closely aligns the interests of our team with shareholders, recognises and rewards superior performance and allows our people to share in the benefits of continued strong performance by Perpetual. We are also consolidating our Sydney offices into one building to promote teamwork, improve communication, enhance our clients experiences and to achieve productivity gains.

"Throughout 2004 we have commenced implementing a number of initiatives that position us more strongly in our existing markets and expand the range and reach of our operations. We will provide updates on these and other initiatives during the vear." he said.

"The level of funds under management and under advice has given us a good start to the 2005 financial year. Perpetual operates in favourable market sectors that are forecast to continue attractive growth and, at this early stage of the year, we expect an improvement in operating earnings in excess of 10 percent, subject to investment market conditions. We remain focused on building our business by improving our service to clients, investing in our trusted brand and carefully managing our costs," Mr Deverall said.

-000-

Editor's Note: Perpetual has made available its full 2004 annual report on its website today (www.perpetual.com.au). For further information, please contact:

ΩĖ

Mr David Deverall Managing Director Perpetual Trustees Australia Limited Ph: (02) 9229 9087

Hayley Morris Corporate Communications Manager Perpetual Trustees Australia Limited Ph: (02) 9229 3936

24 AUGUST 2004