Given its range of strategies, you might think that Man Group (EMG) would have been able to ride out this year’s market turmoil. But with interest rates heading towards negative territory, there have been few hiding places.
Statutory earnings halved from the first half of 2019, or pulled back by 37 per cent on an adjusted basis. Some investors believed that a market correction was overdue even prior to the outbreak, but the relatively short duration of the bear market would have caught many off guard.
So, following an increase in redemptions from institutional clients, the investment manager was “bearishly positioned in some of [its] alternative strategies”, resulting in relative underperformance as market valuations retraced rapidly. Ultimately, that fed through to a negative investment performance of $5.4bn (£4.2bn), while net outflows rose to $1.2bn.
Quantitative long-only strategies were down 5 per cent, while discretionary long-only strategies registered a fall of 11 per cent, even though absolute performance improved markedly through the second quarter. Half-year figures were also held in check by negative currency translations, maturities and leverage movements.
Consensus points to adjusted EPS of 9.47p in the current year, rising to 12.17p in 2021.
| MAN GROUP (EMG) | ||||
| ORD PRICE: | 122p | MARKET VALUE: | £1.81bn | |
| TOUCH: | 122-123p | 12-MONTH HIGH: | 177p | LOW: 85p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 107p* | NET DEBT: | £22m | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2019 | 520 | 110 | 5.90 | 4.7 |
| 2020 | 403 | 55.0 | 2.70 | 4.9 |
| % change | -23 | -50 | -54 | +4 |
| Ex-div: | 06 Aug | |||
| Payment: | 02 Sep | |||
| £1 = $1.31. *Includes intangible assets of $802m, or 54ȼ a share | ||||
