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Australian Ethical net profit up 53%
Australian Ethical Investments has reported a net profit after tax of $3 million for the year ended 30 June 2016, up 53 per cent on the previous corresponding period.
In an announcement to the Australian Securities Exchange (ASX), the firm said the profit increase was attributable to strong growth in net inflows (up 78 per cent to $319 million) as investors continued to embrace ethical investing.
Australian Ethical's revenue grew 8.8 per cent to $23 million and its superannuation membership increased 24 per cent to 24,342.
The firm noted other reasons that impacted its results were its fee reduction strategy for its superannuation fund, provision for unit pricing errors, and the impairment of the building held in Canberra.
"We have been undertaking a fee reduction strategy for our superannuation fund aimed at improving its competitiveness to position it for long-term growth. As part of this strategy, a reduction of 0.3 per cent was made on 31 July 2015 and a further reduction of 0.22 per cent was made on 30 June 2016," the firm said.
"Increased net inflows were sufficient to offset the impact of these reductions. This and other factors such as increased flows into the wholesale funds continue to reduce our overall average revenue margin."
Australian Ethical said it had made a provision of $0.9 million in relation to the expected remediation of the impact on super members for unit pricing errors.
"An investigation is underway and further information will be provided to the market in the first half of FY2017. The company is committed to ensuring that members are not materially disadvantaged as a result of these errors," it said.
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