The company is a funds management company in Sydney which was established by Kerr Neilson in 1994. Their primary product is the Platinum International Fund. They also have funds specialise in Europe, Asia, Japan, healthcare, technology and international brands. In June 2021 Platinum held funds under management (FUM) of $23.5 billion.
I just want to quickly review the three financial statements and FUM last 5 years change. The company’s share price dropped over the year although their funds are doing well. But there are concerns about the outflow and insider trading.
Simplified P/L last 5 years,
| FY17 | FY18 | FY19 | FY20 | FY21 | |
| Revenue(m) | 312.47 | 328.68 | 295.22 | 284.98 | 269.24 |
| Net income(m) | 186.03 | 191.59 | 157.61 | 155.61 | 163.26 |
| Share of outstanding(m) | 585.1 | 583.2 | 581.6 | 580.0 | 578.7 |
| EPS(cent) | 31.8 | 32.9 | 26.8 | 26.8 | 28.2 |
Revenues are from fees which are management and performance. But it is mainly from the Management fee based on the last two FYs. There are other incomes however compared to the management fee, they are not much. In the last 2 years, expenses are about 80 million and after-tax they get over 150 million or so. The earning is to me kind of stable for this company. The share price is about A$2.7/share or so at the end of 2021. I believe the company is now cheap.
And, the simplified B/S of PTM is below,
| FY17 | FY18 | FY19 | FY20 | FY21 | |
| Current Assets (m) | 351.4 | 248.1 | 222.8 | 189.9 | 220.8 |
| Total Assets(m) | 354.0 | 445.8 | 344.1 | 355.2 | 382.3 |
| Current Liabilities (m) | 21.9 | 27.3 | 17.0 | 21.9 | 21.8 |
| Total Liabilities (m) | 18.9 | 34.7 | 23.1 | 36.3 | 40.2 |
| Net Assets = Total equity | 335.1 | 335.2 | 321.1 | 319.0 | 342.0 |
| Net Assets/share | 0.57 | 0.57 | 0.55 | 0.55 | 0.59 |
Assets are well controlled over 300 million, the company has no debt. It is not likely it goes bankrupt or something in near future. Net Assets and Total equity are the same as far as I see their financial statement, net assets/share is about A$0.55-0.60 per share.
Below is a table for cashflows
| FY17 | FY18 | FY19 | FY20 | FY21 | |
| CF from operating (m) | 165.4 | 154.6 | 166.3 | 150.8 | 140.5 |
| CF from investing (m) | -22.32 | -29.1 | -105.7 | 8.1 | 40.8 |
| CF from financing (m) | -107.8 | -116.6 | -112.9 | -167.0 | -142.4 |
| Dividends paid | -181.6 | -181.2 | -169.1 | -157 | -133 |
| Free CF | 169.4 | 159.2 | 170.8 | 144.9 | 144.7 |
| Cash and cash equivalent | 154.2 | 164.3 | 113.0 | 105 | 143.3 |
| Cash/share (cent) | 26.4 | 28.2 | 19.4 | 18 | 24.7 |
The company has a good amount of cash. The company paid their earnings out almost all to investors. So as long as they manage this company well, it will keep going. So you need to know if you accept it or not. So if you pay A$2.7 a share, you will get about A$0.28 earning/share for every year and $0.55 total assets/share including $0.25 cash/share. So about the P/E ratio is now about 10 or so.
I believe that their source of income their funds, the FUM (Funds under management) of PTM are changing like below
| FUM A$b | 30 June 2017 | 30 June 2018 | 30 June 2019 | 30 June 2020 | 30 June 2021 |
| FUM | 22.7 | 25.7 | 24.8 | 21.4 | 23.5 |
| Change (%) | -9.6% | +13.1% | -4% | -14.0% | +10% |
| Change(B) | +0.0B | +3.0B | -0.9B | -3.4B | 2.1B |
| Change-Performance | +4.7B | +2.0B | -0.7B | -0.4B | +5.5B |
| Change- Net outflow | -4.7B | +1.0B | -0.2B | -3.0B | -2.3B |
The biggest news which is not good at all for investors is Judith Neilson, the former wife of Platinum founder Kerr Neilson has sold a big share of the company on 15th October 2021, her share of the company dropped from 21.48% to 4.93%, she sold 16.55% share of the company at the price of A$3.0/share. So that, you have to evaluate how her move affects the company in the future. So far I believe, the company will do well, at least it will manage to keep constant. So I believe the share price of PTM is now underpriced. However, I am not a financial adviser so if you want to invest in the company, please do your own research. Especially, nowadays, these funds business is very competitive and more index funds are available. The company seems to be trying to get more international investors. So, you should consider them.