* Dividend payout ratio cut to 50%-to-70% from 60%-to-80%
* Market comfortable with reduction in target payout-Goldman
* Q1 profit "significantly up" from pandemic hit a year
SYDNEY, July 29 (Reuters) - Australia's Macquarie Group
said on Thursday first-quarter profit for fiscal 2022
was up significantly from the pandemic-hit period a year
earlier, but warned of lower dividends to come as it diverts
cash to grow its business.
Chief Executive Shemara Wikramanayake also said during a
virtual annual meeting that she regretted the impact on
investors from the troubled 2020 IPO by Nuix Ltd, in
which Macquarie had a 70% stake at the time. The software vendor
has lost over half its value since then.
The country's largest investment bank and fund manager said
in its quarterly update that its annual dividend payout ratio
would be lowered to between 50% and 70% from a range of 60% to
80% at the end of fiscal 2021.
The decision was driven by its significant capital
deployment recently, including A$3.8 billion ($2.80 billion)
worth of investments over the past nine months, and its
intention to have more "flexibility" given "further
opportunities in the coming months", it said.
Its trading update did not provide an earnings number for
the first quarter or explicit guidance for fiscal 2022 earnings.
The warning of a lower payout drove Macquarie's shares only
0.5% lower in early trading before they recovered later in the
day to stand up 0.37%.
"While a reduction in the target payout ratio would normally
bode poorly for an Australian financial, given Macquarie's very
strong track record in investing incremental capital at a solid
return above its cost of capital, we think the market will be
more than comfortable," Goldman Sachs analysts said.
Asked during a separate media call about a recent news
report that a consortium led by Macquarie Group was considering
an offer for Sydney Airport Holdings, Wikramanayake
declined to comment.
Sydney Airport rejected a A$22.26 billion takeover proposal
from a group of infrastructure funds earlier this month.
"DEEPLY REGRET" IMPACT FROM NUIX IPO
At the virtual annual meeting, disgruntled investors probed
Macquarie about its role in Nuix's controversial IPO,
Australia's second-largest of 2020, with some investors saying
they only invested in it because Macquarie's name was appended
Macquarie profited greatly from the IPO but the tech company
has lost over half its value since listing in December after
missing forecasts and has been accused by the corporate
regulator of allegedly providing investors with misleading
forecasts in its prospectus. Macquarie has a remaining 30% stake
in Nuix and is its largest shareholder.
Nuix's former CFO is also being investigated for alleged
"We deeply regret the impacts that there have been on
investors in Nuix," Wikramanayake said at the virtual meeting,
adding the bank had reviewed its IPO processes and had found no
"At the time of the IPO, we all had no reason to believe
that the prospectus forecasts would not be achieved. Now,
clearly circumstances appear to have changed quickly after
Macquarie was committed to remaining an investor in Nuix,
she added. Nuix shares, which listed at A$5.31 per share, were
up 1.6% at A$2.54, the largest daily gain in a week.
In its trading update, Macquarie also said its investment
banking, asset management and lending businesses had positive
outlooks, but last year's windfall from its commodities trading
business was unlikely to be repeated this fiscal year.
($1=1.3578 Australian dollars)
(Reporting by Paulina Duran in Sydney and Sameer Manekar and
Arundhati Dutta in Bengaluru; Editing by Devika Syamnath and Ana
Nicolaci da Costa)