Australian Ethical lifts earnings guidance

Steven Deare
(Australian Associated Press)


Conscientious investing is proving increasingly profitable for Australian Ethical Investment after the fund manager sharply raised its full-year earnings guidance.

The company, which supports technology such as renewable energy and avoids companies that exploit workers or animals, on Tuesday told the market it expects underlying profit after tax of between $9 million and $9.5 million for the financial year ended June.

That is a significant improvement over its previous guidance of for underlying profit to be between $6.8 million and $7.5 million issued in June.

It had reported net profit of $6.5 million in FY19.

The company earned a performance fee of $3.64 million after its Emerging Companies Fund returned 13.9 per cent after fees, against a benchmark return of negative 7.4 per cent.

The fund comprises of money invested in small companies, which staff choose on ethical principles and investment analysis.

Only wholesale investors who allocate more than $25,000 can participate in this fund.

Bell Direct analyst Jessica Amir said ethical investing was increasingly popular due to growing interest in environmentalism.

She believed this helped the company achieve a 29 per cent jump in 2019 full-year net profit.

Australian Ethical had $3.92 billion in funds under management as of May 31.

Shares in the company were higher by 6.77 per cent to $6.78 at 1248 AEST. The stock has gained nearly 76 per cent since January 1, despite the market turbulence from the coronavirus pandemic.


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