Like a tanker, Henderson (HGG) has taken time to turn round to better results following the acquisition of New Star in 2009 and Gartmore two years later - followed by extensive fund rationalisation.
The benefits of these corporate actions have yet to show through in the financial numbers, with 2012 income hit by almost halved performance fees to £33.9m while underlying pre-tax profits were down from £159.2m to £146.5m - and that's after knocking £20m off employee costs. Its 'dependency' on European equities and subdued demand for this segment in 2012 clearly contributed to a £3.9m net outflow of funds.
But recurring profits after deducting amortisation, void property finance charge and Gartmore employee share awards were stable at £82.4m and some of the other numbers are encouraging. For example, the group had assets under management of £65.5bn at the end of December, the highest for five years, as investment performance improved. Cash generation has improved, too, and net debt of £28m has been replaced by net unrestricted cash of £17.9m.
To offset the European bias, Henderson is likely to make one or two modest acquisitions and expand in the US and Asia. The group has recently hired a US-based credit specialist team and that move is a precursor to launching US high-yield and global credit funds. It's also beefing up its presence in Australia.
Broker JPMorgan forecasts 2013 adjusted pre-tax profits £14m higher at £161m and diluted EPS little changed at 11.9p.
HENDERSON (HGG) | ||||
---|---|---|---|---|
ORD PRICE: | 151.8p | MARKET VALUE: | £1.7bn | |
TOUCH: | 151.4-151.8p | 12-MONTH HIGH: | 165.6p | LOW: 90.55p |
DIVIDEND YIELD: | 4.7% | PE RATIO: | 17 | |
NET ASSET VALUE: | 70p* |
Year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|
2008 | -17.0 | -3.2 | 6.10 |
2009 | 15.5 | 1.8 | 6.10 |
2010 | 76.5 | 9.9 | 6.50 |
2011 | 13.0 | 3.6 | 7.00 |
2012 | 96.2 | 9.6 | 7.15 |
% change | +640 | +167 | +2 |
Ex-div: 8 May Payment: 31 May |