Man (EMG) may be turning a corner. The continued popularity of quant strategies, which trade using algorithms rather than manager discretion, offset outflows from subsidiary GLG's funds, in particular. Overall, net inflows were $1.9bn (£1.5bn) during 2016. However, a reduction in funds under management and thus fees (as well as lower performance fees) for GLG led management to write-down $281m in goodwill relating to the business. It wrote down a further $98m in goodwill in relation to its 2000 acquisition of fund-of-funds business Glenwood, wiping out reported pre-tax profit.
At group level, funds under management increased by 3 per cent to $80.9bn, primarily due to $3.2bn in investment gains. Long-only strategies were the top performers, gaining $3bn in value. But net management fee revenue fell by 9 per cent to $691m, on the back of lower GLG assets and the run-off in higher-margin guaranteed products.
The better news was that 2017 is the last year management expects these products to have a significant year-on-year impact on its overall management fees, since GLG has just $400m funds under management.
Analysts at Numis expect adjusted pre-tax profit of $229m for the 12 months to December 2017, giving EPS of 11.9¢ (from $205m and 10.4¢ in 2016).
MAN (EMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 143.2p | MARKET VALUE: | £2.39bn | |
| TOUCH: | 143.1-143.3p | 12-MONTH HIGH: | 164p | LOW: 103p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 100¢* | NET CASH: | $240m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earning per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 1.30 | -748 | -45.8 | 22 |
| 2013 | 1.16 | 56 | 3.0 | 22 |
| 2014 | 1.15 | 384 | 20.8 | 7.9 |
| 2015 | 1.14 | 184 | 10.1 | 10.2 |
| 2016 | 0.83 | -272 | -15.8 | 9 |
| % change | -36 | - | - | -59 |
Ex-div: 20 Apr Payment: 12 May *Includes intangible assets of $1.04bn, or 62¢ a share £1=$1.23 | ||||
