FUM growth is impressive. The main issue they have to deal with...

FUM growth is impressive.
The main issue they have to deal with is keeping costs contained. I always knew H1 15 was going to be the tough half to show a decent profit as it was the first half with lower fees while still waiting for FUM to catch up to a level which fully offset the revenue loss. Fortunately FUM grew enough to full cover the revenue loss.
Unfortunately costs grew more than expected. After all the cost cutting and one-off redundancy costs in FY14 it was expected costs for FY15 should be flat on FY14. That's the impression I took away from discussions. Yet they have found more reasons to grow the cost base. Hopefully they are just 'one-offs' but a habit has developed of one-off costs appearing every year. I clean result would be nice for a change.
H2 15 should show a much improved profit if costs are contained. For every $100m of FUM they add an extra $1.85m of revenue appears on current fees. In theory a decent chunk of this should fall though to NPBT.
However it should be noted that there is ongoing pressure on fees and I expect further fee reductions in the coming years. Hopefully it's not a year on year case of strong FUM growth off-set by fee reductions and cost increases. Otherwise we will be peddling to stand still.
I have a reduced position at the moment. The FIM group have been a constant seller since late last year and they were creating a wall at $42 prior to Xmas so I jumped in front of them several times. I expect their holding still exceeds 50,000 shares although I'm not sure if they intend to sell completely out.
AEF needs to demonstrate revenue can grow at a decent rate above expense growth. I'm not sure how many people in the company focus on this. I'm sure the MD and board mostly do however I've got the impression there is also a culture among some staff that lowering fees attract more FUM which allows them to further their environmental cause. Growing FUM to grow NPAT for shareholders is not the sole focus. That can be unhealthy for shareholders if it goes too far.