The company is well diversified with six different operating groups which include:
|-||Macquarie Capital: Which includes corporate advisory, equity, debt and private capital markets businesses, and undertakes principal investing|
|-||Macquarie Securities: Activities include institutional and retail derivatives, structured equity finance, arbitrage trading, synthetic products, capital management, collateral management and securities borrowing and lending|
|-||Fixed Income: Currencies and Commodities: Provides a variety of trading, research, sales and financing services across the world with an underlying specialisation in interest rates, commodities or foreign exchange|
|-||Macquarie Funds Group: Full-service asset manager|
|-||Banking and Financial Services: The primary relationship manager for Macquarie Group’s retail client base|
|-||Corporate and Asset Finance Group: The lending and leasing business of Macquarie Group|
Today MQG reported its 1H13 results with its first-half dividend and pre-tax profit beating market expectations. The company’s 1H13 net profit was $361 million, up 18% on the prior corresponding period. This actually missed consensus earnings by 3%.
Operating income dropped to $3.1 billion, a 5% fall on 1H12. What impressed was MQG’s ability to adjust for the loss of income with a 9% reduction in operating expense, showing its focus on cost savings.
Return on equity (ROE) increased from 5.7% in 1H12 to 6.6% in 1H13, highlighting a more profitable deployment of shareholder funds.
The group’s EPS grew by 22% on the prior corresponding half to $1.06. As the above shows, this is the company’s first half of positive EPS growth in more than five years and with think this could be the turnaround for the company’s fortunes.
Another item we found impressive with the results was the dividend payment. It climbed $0.10 from the 1H12 payment, to $0.75.
MQG’s 1H13 results were impressive to say the least. Out of all the figures released today the numbers we liked the most were the reduction in operating expenses, the increased dividend payment, and the return to EPS growth.
All the above mentioned figures show us that MQG has turned a corner and we believe this will lead to continued share price appreciation.
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