The West

Perpetual flags big profit downgrade
Perpetual flags big profit downgrade

Fund manager Perpetual has forecast a massive full year profit slide and pay cuts for its board as it begins a major restructure.

Perpetual chairman Peter Scott will have his pay cut by 42 per cent, while pay for non-executive directors is to drop by an average 25 per cent, the company said.

The cuts are part of a three-year program aimed at reducing costs by $50 million annually.

Perpetual also forecast its full year net profit will slump to between $22 million and $29 million, down from $62 million in the 2010/11 financial year.

The profit fall would be caused by costs associated of the company's restructure, which would be between $38 million to $41 million in 2011/12, Perpetual said.

The changes to the pay for the non-executive directors will take effect from July 1, and cut $500,000 in costs, Perpetual said.

"The reductions to the board costs show that we are committed to a company wide review to enable Perpetual to support a return to growth in value for shareholders," Mr Scott said in a statement.

Chief executive Geoff Lloyd said the changes come after a comprehensive review of the business that began when he was appointed in February.

"We needed to take an honest look at our business and it was clear our operating model was not sustainable and our operational structure not optimal," he said.

Perpetual also announced it would sell its mortgage processing business Perpetual Lenders Mortgage Services (PLMS), with negotiations with a buyer well advanced.

PLMS employs 280 full time workers.

The West Australian

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