Australian Ethical Investment Ltd reported a 15% rise in underlying profit after tax to $27.3 million for the year ended June 30, 2026, as funds under management increased 11% to $14.05 billion.
Net profit after tax attributable to shareholders rose 29% to $25.7 million, while total revenue grew 9% to $129.5 million. The company declared a final dividend of 10 cents per share, bringing the full-year payout to 18 cents, a 29% increase from FY25. The dividend payout ratio was maintained at 80% of net profit.
Average funds under management reached $14.05 billion, up from $12.65 billion a year earlier, with total funds under management at June 30, 2026, reported at $14.50 billion. Organic net inflows totaled $663.9 million, a 13% increase year-over-year, driven by superannuation contributions and a $125 million cornerstone investment from the Clean Energy Finance Corporation.
Operating expenses rose 7% to $90.4 million, though the cost-to-income ratio improved by 1.6 percentage points to 69.8%, extending a multi-year downward trend. Diluted earnings per share stood at 22.48 cents on a net profit basis, up from 17.43 cents in FY25, reflecting a four-year compound annual growth rate of 27%.
The company highlighted a 20% increase in new member joins in the second half of FY26, supported by reduced superannuation administration fees from 0.26% to 0.25%. Regulatory capital surplus rose to $22.7 million, while cash and term deposits increased to $50.8 million. Employee expenses climbed 11%, though IT expenses surged 26% amid digital transformation initiatives.
Investment performance varied across funds, with the International Shares Fund matching its benchmark and the Private Markets Growth Opportunities Fund delivering a 21.2% return, outperforming its 10% benchmark. The Australian Shares Fund underperformed due to exclusionary screens, though it maintained a positive long-term track record since 1994.
Australian Ethical also marked its 40th anniversary and received a record $3.4 million donation to its foundation, bringing cumulative allocations to charitable organizations to over $16 million since 2010.
