Faced with a jaded image in the wake of the financial crisis, fund manager Henderson Group (HGG) set about rebuilding itself to appeal more to retail investors. That included the acquisition of asset managers New Star and Gartmore - decisions that appear to be paying off.
Indeed, the measure of the group's comeback was demonstrated by last year’s performance where profits reached record levels. Retail funds grew 30 per cent to £39.3bn and, while institutional assets under management rose less than 2 per cent to £36bn, this would have been higher had it not been for £1.9bn of outflows - driven by one former Gartmore client withdrawing funds.
Management fee income grew from £353.5m to £383m and total funds under management increased by £9.6bn to £75.2bn. Of this, £2.5bn represented net inflows, while the remainder reflected a positive investment performance. It was this that lifted performance fee income from £33.9m to a record £99.6m. With the perceived safety offered by larger and better know brand names, increasing amounts were attracted into fewer funds and Gartmore acted to limit the flow into certain funds in order to protect the interests of existing investors.
Broker Numis Securities expects underlying pre-tax profit of £204.6m for 2014, giving adjusted EPS of 14.8p (2013: £190.1m/14.9p).
| HENDERSON (HGG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 245p | MARKET VALUE: | £2.75bn | |
| TOUCH: | 244-245p | 12-MONTH HIGH: | 248p | LOW: 138p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 74p* | |||
| Year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2009 | 16 | 1.8 | 6.10 |
| 2010 | 77 | 9.9 | 6.50 |
| 2011 | 13 | 3.6 | 7.00 |
| 2012 | 77 | 8.2 | 7.15 |
| 2013 | 107 | 10.1 | 8.00 |
| % change | +39 | +23 | +12 |
Ex-div:07 May Payment:30 May *Includes intangible assets of £638m or 57p a share | |||
