Australia's Magellan Financial hits decade-low on CEO exit, cost outlook

Magellan Financial

25/10/2023 01:40

Oct 25 (Reuters) - Shares of Australia's Magellan
Financial Group  MFG.AX  tumbled more than 7% on Wednesday to
hit over a decade low, after its CEO and managing director David
George stepped down from his roles, with immediate effect, and
as the firm flagged a rise in costs. 
     The Sydney-based company has been struggling through the
year and had earlier flagged its eighth consecutive month of
declines in assets under management to A$35.0 billion. 
    Executive Chairman Andrew Formica will manage operations
while the company undertakes a search for a new CEO, the fund
manager said in a statement. 
    "With the Board renewal process now complete, the business
is positioned to continue the journey to restore Magellan to its
place as one of Australia’s leading fund managers," Formica
said. 
     In a separate statement, the company said it intends to
make additional retention repayments of up to A$7.7 million
($4.90 million), effectively increasing its cost guidance for
fiscal year 2024 Funds Management Business to between A$97.5
million and A$102.5 million. 
    The shares of the fund manager were down as much as 7.2% to
trade at A$6.06, hitting the lowest since April 2013 and poised
for their worst session since Oct. 9 as at 0040 GMT. 
    George, who took charge as the CEO of Magellan on July 2022,
will remain until the end of the year through the transition
period to a handover. 

($1 = 1.5721 Australian dollars)

 (Reporting by Archishma Iyer in Bengaluru
Editing by Shri Navaratnam)
 ((Archishma.Iyer@thomsonreuters.com;))