Man Group's shares jumped 10 per cent on the back of the fund manager's half-year results, but the rise was something of a relief rally after the dividend payout was maintained and a promise made to maintain the final payout. However, Man's heavy reliance on its AHL fund, which continues to perform weakly, leaves the shares facing longer-term pressure.
Man relies on its key AHL fund for over 70 per cent of its earnings and continued risk-on/risk-off trading cycles have badly affected the fund's trading performance - with all four component funds returning a negative investment performance in the second quarter. Meanwhile, headline losses reflected impairment charges of $233m (£150m) associated with the GLG and Man Multi-Manager operations but, even so, group adjusted pre-tax profit collapsed from $231m to $121m. Funds under management fell from $58.4bn at end-2011 to £52.7bn - the bulk of that slide reflected a $2.4bn net outflow of funds. Inevitably, this hit management fee income - down 25 per cent to $629m - while performance fees slipped from $49m to $28m.
Numis Securities expects full-year pre-tax profit of $232.8m, giving EPS of 9.2¢ (2011: 262m/10.7¢).
| MAN GROUP (EMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 76p | MARKET VALUE: | £1.38bn | |
| TOUCH: | 76-76.5p | 12-MONTH HIGH: | 244p | LOW: 61p |
| DIVIDEND YIELD: | 14.0% | PE RATIO: | NA | |
| NET ASSET VALUE: | 290¢* | NET CASH: | $564m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 890 | 64.0 | 2.30 | 9.50 |
| 2012 | 657 | -164 | -10.7 | 9.50 |
| % change | -26 | - | -565 | - |
Ex-div:15 Aug Payment:04 Sep *Includes intangible assets of $2.37bn or 130¢ a share £1=$1.55 | ||||
