Emerging markets seem likely to contribute the lion’s share of global growth over the long term. In the short term, however, flip-flopping investor sentiment towards their currencies and debt is hitting the performance of emerging market specialists like Ashmore (ASHM). The group's full-year figures to June attest to this, and shareholders registered their reaction by knocking nearly 6 per cent off the share price.
On the plus side, assets under management held up remarkably well, falling just 3 per cent to $75bn (£46bn). But the investment performance took a knock, with the proportion of assets under management outperforming benchmarks over three years down from 92 per cent to 81 per cent. Inevitably, this had a dramatic effect on performance fees, which fell from £33.4m to £3.1m. With assets holding up, the effect on management fees was less dramatic, but revenue here still fell from £316m to £283m.
Most fee income is earned in dollars, so sterling's strength trimmed profits by £46m. Set against this, Ashmore took a knife to its cost base, reducing total expenses by 23 per cent to £97.9m.
Numis is forecasting pre-tax profits for the current year of £198m and EPS of 22.2p.
| ASHMORE (ASHM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 325p | MARKET VALUE: | £2.3bn | |
| TOUCH: | 324.7-325.3p | 12-MONTH HIGH: | 425p | LOW: 295p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 87p | NET CASH: | 371m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 281 | 217 | 23.9 | 13 |
| 2011 | 343 | 246 | 28.1 | 14.5 |
| 2012 | 333 | 234 | 26.8 | 15 |
| 2013 | 356 | 258 | 30.0 | 16.1 |
| 2014 | 294 | 170 | 19.3 | 16.45 |
| % change | -17 | -34 | -36 | +2 |
Ex-div: 06 Nov Payment: 05 Dec | ||||
