A volatile global economy saw nervous investors shift £2.1bn out of Henderson's funds in the first half of 2012 and significantly reduced performance fees the asset manager earned. While good cost control meant underlying pre-tax profits only dipped from £86m to £79m and underpinned an increased dividend, a cautious outlook means we'd be in no hurry to buy the investment group's shares.
Henderson said that because of its predominately European mix of clients and funds, the ongoing crisis on the continent meant it was struggling to attract new customers with both retail and institutional investors keen to reduce their exposure to risk assets. However, outflows are at least slowing, and Henderson is hopeful that the launch of new products and decent fund performances will see a return to new business growth.
Two-thirds of its funds achieved or beat their three-year benchmark, with continuing strength in fixed income - which benefited from new product launches - offsetting weaker property returns. Henderson hopes that recently signed property joint ventures in China and Italy will help improve this, while new "risk-constrained" funds developed in conjunction with restricted adviser network Sesame Bankhall leave the group well positioned for the imminent implementation of the Retail Distribution Review.
Broker Canaccord expects underlying EPS of 10.1p this year (from 13.2p in 2011).
HENDERSON (HGG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 107p | MARKET VALUE: | £1.19bn | |
| TOUCH: | 107-108p | 12-MONTH HIGH: | 145p | LOW: 89p |
| DIVIDEND YIELD: | 6.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 66p* | |||
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 256 | -3.1 | 1.50 | 1.95 |
| 2012 | 229 | 45.5 | 4.50 | 2.10 |
| % change | -11 | - | +200 | +8 |
Ex-div: 29 Aug Payment: 21 Sep *Includes intangible assets of £742m, or 67p a share | ||||
