Good morning, everyone. Thank you for joining us. I'd like to begin by acknowledging the traditional owners of the country on which we work, the Gadigal people of the Eora Nation, and recognize their continuing connection to the land, waters, and culture. We pay our respects to their elders, past and present. Please note that today's presentation is being recorded, and a recording will be made available on the Australian Ethical website. The slides used in the presentation will also be available on our website. There will be an opportunity for Q&A at the end. Questions can be submitted via the webcast using the Ask a Question box. We may also have media in attendance this morning. I'll now hand over to John to take you through the results.
Thanks, Mel, and good morning, everyone. I'm John McMurdo, the Managing director of Australian Ethical. Before I get into the highlights, of which there are many, I wanted to provide you with some important context for understanding our results today, particularly for newer investors. We're now partway into a high-growth strategy that is already transforming Australian Ethical into a bigger, more impactful business. We're seeing clear results that the strategy is working, and we'll share these key indicators with you again this morning. As part of this context, it's important to understand that Australian Ethical is not your standard listed financial services company. In addition to the value we create for shareholders, we deliver investor returns through ethical investing, which in turn create a positive impact for people, planet, and animals. This dual purpose is in our constitution, and it is the fabric of our organization.
It's why people choose to invest with us and why people want to work for us. Importantly, the drivers for and the demand for this style of investing are clearly stronger than ever and only like to accelerate over the next decade as both the existential threat to the planet and the urgency of humans to address these problems grows. Let me begin this morning by acknowledging that, like all fund managers, our short-term investment performance has not been immune from market volatility. In fact, our particular style of investing has lagged in recent months as fossil fuel and other sectors have benefited from the short-term supply and other issues on account with global conflict and other factors. We will never invest in these style of businesses. We will never seek to profit from things that are bad for the planet, people, or animals.
Our customers are very aligned to this stand. Our customers also know that we have seen these periods before, and that the true measure has been the excellent long-term track record we continue to achieve through multiple investment cycles. Despite the short-term challenges, our business has again proven to be resilient. While many of our competitors have endured outflows, we continue to record positive flows and uplift in funds under management and revenue. We will elaborate in this presentation on the major milestone we achieved with the successful integration of the Christian Super business. This added more than AUD 1.9 billion in fund and also allowed us to retain further business capability. Our shareholders are aware that we are prepared to achieve lower short-term profits in order to capture the seismic shift in our addressable market as the move to responsible investment plays out.
Notwithstanding our short-term bias to customer and fund growth over profit, underlying profit is in line with our expectations. Our strategy remains consistent and as previously articulated, we are already an acknowledged global role model for responsible and principled investing. We are building our business to remain at that forefront. We do believe the shift to responsible investing will accelerate over the next decade. We continue to invest, even during these challenging market conditions, to ensure that when markets do stabilize, we are well-positioned to capture the opportunity. We invest with our customers for a better world and use our collective voice to advocate for such. The experience we create for our investors is one of partnership.
Of course, we are building the capability of the business and investing in an array of growth options to scale our business and deliver even more impact in response to the increase in investor demand for our style of investing. Mark will expand on the financials shortly, we do continue to grow organically and now inorganically also. Our capability and our growth options continue to expand. I refer to M&A capability, a growing advisor channel, a new employment partnership channel, improved investment capability, stronger brand awareness and recognition. The results are positively reinforcing and give us confidence to continue with our growth strategy. Notably, during the half, we added 28,000 new customers and more than AUD 1.9 billion of fund from the Christian Super integration. There was no financial consideration paid for this opportunity.
While the Christian Super transaction has naturally driven the majority of our recent fund uplifts, the core and organic business has also moved forward, despite the challenging market conditions. We achieved positive net flows in the half of AUD 190 million. When extracting the effect of the low marginal institutional mandate that was redeemed in July and August, net flows for the period were actually AUD 370 million, including AUD 300 million of net flows into our superannuation offering. This demonstrates the resilience of our business model with contribution from super, non-super investment, and now also M&A. Our customer numbers grew both organically and via Christian Super to now be more than 110,000. We continue to receive multiple investments and other awards. Our brand familiarity improved overall and notably among advisors.
We've launched a new channel, the employment platforms, to assess the opportunities provided by our different business acquisition models. Our engagement remains at industry-leading highs. Revenue was up 4% on the prior corresponding period and is expected to be up further in the second half as the full effect of the Christian Super is felt. Expenses were up as planned as we built the business capability to support and grow a much larger business. Underlying profit was in line with our expectations at AUD 5 million. NPAT was AUD 1 million after the Christian Super integration costs and also the write-down of our investment in Sentient Impact Group, which we consider a prudent revaluation given the company is in start-up mode, in a difficult investment environment, and like similar businesses, finding early growth and traction more difficult than their ambitious plans.
The awards I alluded to include awards for investment excellence, for the quality of our super fund offering, and for our responsible investment leadership. Our investment portfolio continues to deliver outcomes for the world, avoiding things harmful to the world, delivering lower emissions, more renewable energy solutions, and contributing positively to the UN's Sustainable Development Goals. Our influence extends well beyond the capital we deploy to positive companies. Our investors significantly value that we use our influence in boardrooms with CEOs at AGMs via the media, through sponsoring research, and through submission to industry bodies and governments. Even in addition to all of that activity, we further direct a portion of our profits to important and aligned causes via the Australian Ethical Foundation. I contend you could not find a more authentic, motivated, and action-oriented, responsible investor anywhere.
I do believe that's why we are rated and regarded by Morningstar and others as one of a very small number of true global leaders in our domain. Mark, can I hand to you to run through the financials?
Thanks, John. Good morning, everyone. I'll now give some more details on the financial results. As John mentioned, we have had a successful six months in respect to increasing our fund. Our fund increased by 21% since the same time last year and 35% compared to 30 June. Over a five year period, this also represents a 31% compound annual growth rate or approximately 3x growth since 2018, which is a great result. As John mentioned, the key highlight for the six months period was a successful SFT, with Christian Super members transferring into our super funds and adding AUD 1.93 billion in fund. Our organic strategy has continued to gain traction despite challenging market conditions for pure-play ethical investment managers. Throughout the period, we experienced market volatility for our style of investing.
In the period, the first half positive performance was offset by second half turbulence following the impact of rising interest rates on smaller cap growth stocks, as well as the energy crisis and rallying resources following the Ukraine war. Result being a lower starting point and lower average fund growth. Good news is our second half has got off to a great start with AUD 8.68 billion of funds driving our future revenue growth. We continue to build a business that is diversified and resilient. Our direct-to-customer channel remains our dominant channel. This channel is augmented by our advisor channel, where we continue to make inroads to ensure we are ready to capture the great share of their clients once market conditions are more favorable.
Further, we have expanded our new employer platforms channel and will continue to assess the opportunities for profitable growth via different acquisition models. Our ethical investment management is packaged up into various products, with SFT leading to an increase in contribution by the super fund product. Pleasingly, we've strengthened our asset class mix and the resilience of our portfolio following the SFT. The in-specie transport of alternative assets has resulted in alternatives now making up 6% of our portfolio. Over the last past five years, we've been accelerating our member investor platform growth. In the last 12 months, our customer numbers have increased by 50%, boosted by a further 28,000 members from the SFT. Excluding the SFT, our organic customer growth was 16% across both super and managed funds. Even in trying times, our managed fund investors are steadily increasing.
This is a great achievement to break through the 100,000 customers and end the calendar year on more than 110,000 customers. Our organic net flows continue to be positive within both our super and managed fund products. As previously reported to the market, our main institutional client redeemed its remaining low fee, AUD 180 million in fund early in the period. Even with this impact, we were pleased to maintain an overall positive net flow of AUD 190 million or AUD 370 million excluding the institutional redemption. We continue to see and pursue opportunities in the institutional mezzanine space and are investing in our investment and service platform to manage this channel. Our positive net flow is a positive proof point that our investment in brand, marketing campaigns and education events is paying off.
Our Super net flows remain resilient through cycles with AUD 179 million from Superannuation Guarantee contributions, which is a 43% increase on the prior period. We are very proud of our engagement with industry-leading retention rates. Our outflows are 4% of funds to super and 11% for managed funds. Ongoing fee reductions are a core part of our growth strategy, as we aim to make investing in our products more accessible and competitive for current and future members and investors. In September 2022, we reduced the dollar-based admin fee for super mentioned members. This assisted with industry heatmap positioning. The increased scale from SFT at the end of November allowed further fee reductions to be implemented for all members, improving the competitiveness of our fees in line with our fee strategy.
We have done the heavy lifting on reducing our fees. Since 2015, we've seen funds increase six-fold as our total fee margins have reduced by 80 basis points. We've landed at a revenue margin of 1% at the end of the year. We'll continue to monitor our fees with the aim of sharing the benefits of scale with all stakeholders and accelerating the profitable growth of our business for shareholders. The average fund growth of 3% has supported revenue growth of 4%, which also includes fees from increasing member numbers, partially offset by the short-term impact fee reductions. Standout is the revenue growth from the super funds, while managed funds average fund was down following the institutional redemption and lower market performance compared to the prior comparative period.
Expenses for the period increased 7% compared to the first half of FY 2022. This expense growth is driven predominantly by the continued investment in line with our strategy as we enhance our operating platform and build a business capable of operating at a much larger scale. We have confidence our investment will pay off in the medium term as the demand for responsible investing continues to grow and we gain traction on new products and channels, and operating efficiencies emerge from our upgraded business platform. However, we continue to actively monitor the challenges presented by the external environment, and if current market conditions prevail and growth expectations don't eventuate, we'll adopt a rigorous approach to expense containment. The key drivers of our first half cost increase were in capability and brand and marketing costs.
We've made strategic executive hires with a new Chief Technology Officer, Chief Executive of Super, and a Director of Strategic Projects. Alongside these hires, we've added staff in the investment team, contact center, distribution, technology, product management, as well as investment administration and risk and governance teams. Our current full-time equivalent roles are 111 FTE. As a result of disciplined investment in the business targeting fund and revenue growth, we've delivered in line with our underlying profit expectations. We are conscious of delivering for all our stakeholders and want to be in the best possible position to drive shareholder value in the medium term. Underlying profit after tax is AUD 4.96 million, which is at the upper end of our earnings guidance range. An interim dividend of AUD 0.02 has been declared.
The reduction compared to prior periods reflects the costs associated with investing for future growth and higher profits, in particular, the Christian Super integration costs. Pleasingly, the strength of our balance sheet remains with no debt and a strong cash position. We are focused on adding further scale to our business. We've been through many of the next two slides already. It is worth pausing on these charts. Short-term profit is lower as a result of our reinvestment in the business with the aim to build medium-term higher profitability. We are already seeing increased momentum in the underlying drivers of future growth, like fund. The interrelationship of these different metrics is in line with our expectations and further evidence that our strategy is progressing as planned.
I'll now hand back to John to run through the business update.
Thanks, Mark. In terms of business update, our strategy of investing to grow a more substantial and impactful business remains unchanged. We are even more encouraged to do so given the continued growth and resilience of the business, even in the most testing of times. We're proud of the further strengthening of our business and business model in the half. Our stronger investment capability, our investment into great companies, our efficacy for and our foundation support for important issues and causes, our ability to pass on fee reductions for customers, which of course also builds a moat in customer retention for our shareholders. The fund growth, the uplift in the strength of the team, the further strengthening of our channel strategy and execution. The successful SFT naturally is the single largest highlight of the half.
Not only, as I've said, for the obvious fund uplift, but also the capability uplift. We look forward to the full effect of the revenue uplift following through and flowing through in future presentations of our financials. In terms of outlook, we must assume that challenging markets continue, and we will be ready for that. We also remain ready to capitalize when markets inevitably turn back in our favor. We do expect second half revenues to improve for reasons we have shared. At the same time, while the opportunity to capture more of the consumer shift to responsible investing persists, which we believe it will, we will invest wisely to capture at least our fair share of that growth for our stakeholders. In other words, we will be comfortable with revenue attracting cost growth where we see an ultimate attractive medium-term return on that investment for our shareholders.
There is no doubt that operating leverage is beginning to appear in our business, masked only by sensible ongoing investments for further growth. That operating leverage is expected to start more clearly emerging towards the end of financial year 2024 as we target annualized revenue greater than AUD 100 million. In summary, this morning, this business is now incredibly well-positioned to benefit from the shift to responsible investing. We have unquestioned authenticity, track record, brand, distribution, and an amazingly capable team. A true responsible investment role model. The future for Australian Ethical is very, very bright. Mark and I would be delighted to take any questions from those present.
Thank you, John. We have had one question in so far. What do you mean by increasing M&A capability? Can you talk on Australian Ethical's inorganic strategy post Christian Super?
No. Good. Great question. Look, this business continues to grow very strongly organically, and has done for some time now, and we're excited first and foremost about the organic opportunities in front of us. We have been intentional in seeking appropriate M&A opportunities in the last 12, 18 months. The significant highlight of that activity is clearly the Christian Super integration, which is a significant uplift for us, both in fund and financial terms, but also, as I was saying, capability. That gives us confidence to be able to do more of that. We have made investments in internal capability in the team to be able to execute on that and create pipeline.
It's a clear part of now, you know, our strategic roadmap to look for sensible accretive opportunities, both in terms of scale, and in terms of future capability build-out. You know, exciting to have added inorganic opportunities on top of a strongly growing organic business.
Thank you, John. Another question we've had is one for Mark. Can you explain the net flows that you've spoken about of AUD 190 million? How have you treated the flows from the Christian Super SFC?
Thank you for that question. The flow from Christian Super of AUD 1.93 billion, we see that as John McMurdo was mentioning, the inorganic strategy as one lump sum of inflow. We have excluded it. It's not included in the AUD 190 million of net flows. They are all organic flows. It's AUD 190 plus AUD 1.93 billion that added in the period.
Great. Thank you, Mark. We'll just stand by for a minute while we wait for further questions. If you do have any, please submit through the Q&A function. We've had no further questions in. Thank you, everyone, for dialing in and listening. I wish you a good day. Thank you.