Pinnacle Investment Earnings: Resilience Evident Amid Challenging Markets

Narrow-moat Pinnacle’s net profit aftertax for the first half of fiscal 2024 was broadly flat from the previous corresponding period and was as expected. The underlying drivers surprised us, though. Affiliate profits grew 30% from the PCP, with better-than-expected net inflows and fee margins resulting in strong revenue. However, elevated growth expenses exceeded our forecasts, with affiliate pretax profit margins contracting to 41% from 44% in the PCP.