Investment firm on track to equal its record result
Macquarie lifts bar
MACQUARIE Group has lifted its full- year guidance, putting the investment company on track for one of the best results in its history.
Macquarie Group said on Thursday it expected its 2015- 16 profit to be above the $ 1.6 billion result it posted for the year to March. Analysts expect the company to make a $ 1.8 billion profit for 2015- 16, which would equal the record result it posted in 2008, just before the global financial crisis.
Macquarie had previously said it expected its full- year profit would be only slightly higher, with a lower tax rate offsetting what it believed would be a flat performance across its divisions. The improved guidance is based on a stronger outlook for the company’s asset management business, which benefited from an increase in performance fees during the first quarter, as well as the lower Australian dollar.
“As a result, we expect the group result to be up on where we were last year,” chief executive Nicholas Moore told shareholders at the company’s annual general meeting on Thursday. The company has not changed the outlook for its other divisions, which are all expected to produce a flat or stronger result for the year.
Macquarie has developed a reputation for under- promising and over- delivering under Mr Moore: it flagged a flat result at the beginning of last year but ended up lifting its profit 27 per cent. Meanwhile, the company says it has paid out $ 11 million in compensation to clients affected by a scandal in its wealth management division.
Macquarie entered into an enforceable undertaking with the Australian Securities and Investments Commission to improve processes and training in the division.
“We are satisfied that the Macquarie Private Wealth business has been transformed in terms of its compliance practices and processes,” chairman Kevin McCann told shareholders at the company’s annual general meeting in Sydney.
IMPROVED OUTLOOK: Macquarie Group chief executive Nicholas Moore.