Emerging markets asset manager
The drop in management fee income was due mainly to adverse exchange rate movements and an expected reduction in average revenue margins that came largely as a result of a shift in investment themes and client mix. Lower performance fees reflected the fact that some funds are only paid fees at the performance year-end, which in some cases fell outside the six-month trading period. Crucially, all the major investment categories delivered a positive net performance, and the percentage of assets outperforming their relevant benchmarks over one year rose from 23 per cent last June to 89 per cent.
Analysts at Numis Securities are forecasting full-year pre-tax profits of £216m and EPS of 22.8p (from £243.2m and 25.8p in 2012), recovering to £238m and 25.2p, the year after.
|ORD PRICE:||360p||MARKET VALUE:||£2.57bn|
|TOUCH:||360-361p||12-MONTH HIGH:||402p||LOW: 300p|
|DIVIDEND YIELD:||4.2%||PE RATIO:||13|
|NET ASSET VALUE:||80p*||NET CASH:||£330m|
|Half-year to 31 Dec||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 13 Mar
Payment: 12 Apr
*Includes intangible assets of £86m, or 12p a share
Numis points to falling fee yields and eroding cash margins from a very high base, suggesting that future earnings growth may be much lower than AUM growth. So much so that a doubling in AUM over the next five years would only translate into 4 per cent annual EPS growth. Trading on 16 times forecast earnings, the shares look up with events. Hold.
Last IC view: Hold, 372p 25 Oct 2012