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A mix of outflows and market highs for Henderson

Volatile markets have muted investors' appetite for risk, but the group's eye is on the future and its impending merger
February 9, 2017

It was Charles Dickens who wrote: "It was the best of times, it was the worst of times." Henderson (HGG) shareholders could be forgiven for applying the description to these numbers, with the manager benefiting from equity market highs but losing money from nervy investors. The quote from A Tale of Two Cities is especially apt given Henderson's imminent de-listing from the London Stock Exchange and move to New York as part of its merger with Denver-based Janus Capital Group.

IC TIP: Hold at 211p

Analysts at Numis have called it a "done deal" - not expecting a counter offer - and believe the logic for the tie-up is sound, with sufficient scope for decent cost synergies. But they warn that, in the short term, there could be slower growth on the cards as investors adopt a "wait-and-see" approach in light of continued market volatility.

This loss of investor appetite hurt Henderson last year, leading to net outflows of £4bn (2015: £8.5bn net inflows). Assets under management actually moved up 10 per cent to £101bn due to a £13bn leg-up from market performance and foreign exchange translation.

In light of the merger and de-listing, analysts at Numis have suspended financial forecasts.

HENDERSON GROUP (HGG)
ORD PRICE:210.6pMARKET VALUE:£2.38bn
TOUCH:210.5-210.8p12-MONTH HIGH:279pLOW: 193p
DIVIDEND YIELD:5.0%PE RATIO:21
NET ASSET VALUE:94p*NET CASH:£226m

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201238677.08.27.2
201347310710.18.0
201453813611.79.0
201575616814.710.3
201673813910.010.5
% change-2-17-32+2

Ex-div: 4 May

Payment: 19 May

*Includes intangible assets of £657m, or 58p a share