Perpetual Limited — Earnings Release 2008

Aug 19, 2008

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20 August 2008 (MR 08 – 24)

Perpetual’s 2008 result in line with guidance

The Chairman of Perpetual Limited (Perpetual), Mr Robert Savage, today announced an operating profit after tax for the 2008 financial year of $133.5 million, a decrease of 8 per cent from the prior year.

The result was consistent with his ‘Letter to shareholders’ in May 2008, which forecast operating profit after tax for the 2008 financial year of between $130 - 140 million.

Net profit after tax for the year to 30 June 2008 was $128.8 million, which included gains on sale of investments and marked-to-market losses relating to the Exact Market Cash Fund. The table below refers.

				J u n 2 0 0 8	J u n 2 0 0 7	C h a n g e	C h a n g e
				$ m	$ m	$ m	%
O	p	e	ra tin g p ro fit a fte r ta x	1 3 3 .5	1 4 5 .3	(1 1 .8 )	(8 )
			G a in o n s a le o f in v e s tm e n ts	2 1 .1	3 6 .8	(1 5 .7 )	(4 3 )
			E M C F lo s s e s	(2 5 .8 )	-	(2 5 .8 )	~
N	e	t	p ro fit a fte r ta x	1 2 8 .8	1 8 2 .1	(5 3 .3 )	(2 9 )

Total operating revenues rose 6 per cent to $495.7 million due to:

• growth in performance fees in Perpetual Investments for outperforming the benchmark

• the development of Perpetual’s new structured products business

• expansion of Perpetual’s mortgage services following the acquisition of Wignalls Lenders Mortgage Services and National Lending Solutions

Perpetual announced a final fully franked ordinary dividend to shareholders of $1.41 per share, which will be paid on 12 September 2008 (record date 29 August 2008). The total ordinary dividend paid to shareholders for the 2008 financial year was $3.30 per share.

Perpetual’s Chief Executive Officer, Mr David Deverall, said the Australian stock market experienced one of the largest declines in its history in 2008 and Australian investors experienced their worst returns for more than 25 years.

“Our environment has a defining influence on the performance of our business and we were clearly not immune to these market forces in 2008,” he said. “As fellow shareholders, we are disappointed this year’s results have not been consistent with previous results, which delivered total returns for our shareholders in excess of 30 per cent per annum in the decade up to 2007.”

Perpetual Investments’ funds under management were $30.3 billion at 30 June 2008, a decrease of $8.8 billion on the previous financial year. This result was due primarily to reduced values in the equity and debt markets and also outflows from Perpetual’s credit and fixed interest and Australian equities institutional businesses.

Perpetual Private Wealth’s funds under advice were $7.7 billion at 30 June 2008, a decrease of $0.7 billion on the previous financial year. The amount comprised $0.4 billion of net inflows, which was offset by $1.1 billion of asset erosion associated with the decline in the value of equity markets.

Perpetual Corporate Trust’s funds under administration were $222.9 billion at 30 June 2008, an increase of $12.8 billion on the previous financial year.

Mr Deverall said that Perpetual could not escape the external forces which had impacted its business in the past 12 months but it could formulate appropriate and timely responses to its opportunities and challenges.

“Firstly, we must continue to invest in our strategic priorities. The defining factor driving growth in our industry is Australia’s compulsory superannuation regime. Only by taking a strategic approach to the issues can we ensure the ongoing development of our business and ultimately create long-term value for our shareholders,” he said.

“Secondly, we must maintain our conviction for the way we manage money. We have one of the most enduring and reputable brands in the Australian financial services industry based on some of the longest serving, experienced and most awarded fund management teams in Australia; a proven track record of excellent long-term returns over multiple market cycles; a level of professionalism and integrity which is consistent with our trustee heritage; a clear commitment to long-term wealth creation rather than short-term speculation; and a prudent investment philosophy”.

“Finally, we must respond to the overall decline in market levels by continuing to review elements of our cost base. However, these objectives cannot come at the expense of our ability to grow our business or at the risk of adversely impacting the effectiveness of our key internal controls.”

Outlook

Mr Deverall said the current financial year to date had mirrored the ‘bear’ nature of the market in 2008.

“We must caution that our operating environment remains uncertain,” he said. “A continuation of the current market conditions would again impact our revenues and profitability in 2009.”

Mr Deverall added: “Our faith in our business is resolute and we are in no doubt that it will withstand the challenges of our operating environment without compromising our future success. The core of our business is very robust. It is backed by a strong balance sheet and a great team of people. Perpetual is in an excellent position to take advantage of growth opportunities as they arise in the market.”

Please follow the link to a full copy of Perpetual’s 2008 Annual Report: Part One - Annual Review and Part Two - Statutory Financial Statements. Please also find links to the media presentation and the analyst presentation on Perpetual’s 2008 results.