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24 September 2018
Year ended 30 June 2018
River and Mercantile Group PLC ("the Group"), the advisory and investment solutions business, today releases its unaudited preliminary results and management report for the year ended 30 June 2018.
Highlights for the year ended 30 June 2018
· Fee earning AUM/NUM increased by 9% year on year, to £33.8bn;
· Gross sales for the year were £5.7bn;
· Net flows for the year were £2.1bn;
· Investment performance increased AUM by £0.7bn;
· Net management and advisory fees increased by 15% year on year to £64.2m;
· Performance fees were £10.6m, compared to £12.5m in the prior year;
· Statutory net profit after tax was £15.1m, compared to £13.4m in the prior year;
· Statutory basic earnings per share were 18.83 pence per share, compared to 16.45 pence per share in the prior year;
· Adjusted underlying profit before tax1 was £16.1m, compared to £16.4m in the prior year;
· Adjusted profit after tax2 was £17.6m, compared to £18.6m in the prior year;
· Adjusted basic earnings per share3 was 21.85 pence per share, compared to 22.90 pence per share in the prior year;
· A second interim dividend of 5.5 pence per share has been declared, of which 1.3 pence is a special dividend and relates to net performance fees;
· A final dividend has been proposed for the year ended 30 June 2018 of 5.5 pence per share, of which 2.3 pence is a special dividend and relates to net performance fees;
· The total dividends paid, declared and proposed in respect of the year are 18.6 pence per share, representing 80% of the adjusted underlying profit after tax and 100% of the net performance fee profit after tax;
· The dividend equates to 85% of adjusted basic EPS.
Jonathan Dawson, Chairman, said:
"The last year has been marked by significant political changes, and increased economic and market volatility and it has certainly been a challenging one for investment managers.
Against that backdrop, the Group's performance in the past year has been positive.
We continued to grow our net management and advisory fee revenue at more than 12%, although stronger growth in the first half of the year was tempered somewhat by the impact on assets following the dismissal of a portfolio manager.
We have also seen the impact on margin from regulatory changes such as MiFID II as well as the significant level of investment that we have made in infrastructure and new initiatives. As a result, whilst statutory profit before tax increased by 13%, adjusted underlying profit before tax fell by 2% due to the margin impacts. We have continued our policy of returning a high level of our adjusted profit to shareholders, with the Board declaring a second interim dividend of 5.5p, of which 1.3p is a special dividend relating to performance fees; and we are proposing a final dividend of 5.5p, of which 2.3p is a special dividend relating to performance fees. This takes total dividends this year declared and proposed of 18.6p, or 85% of adjusted profit."
Mike Faulkner, Chief Executive Officer, said:
"We have had a decent year in the Group and moved past some issues we faced. We continue to perform well and deliver on client outcomes across all lines, and the Group continues to experience low attrition and high client satisfaction. We have strengthened our distribution resource in markets we have previously identified as key and have added new strategies to support growth.
I think we are positioned well for where we believe we are in the market cycle, and this is informing how we approach product launches. We have continued during the year to strengthen our corporate processes and reinforce our culture, which is critical for us to continue delivering value to clients and shareholders.
I remain of the view that we are well positioned to make good progress towards our strategic objectives."
1 Adjusted underlying profit comprises net management and advisory fees less associated remuneration, administrative expenses excluding IT transition costs, depreciation and amortisation of software, and finance income and expense.
2 Adjusted profit comprises adjusted underlying profit, plus performance fees net of associated remuneration and the gain on the Global Macro fund seed position.
3 Adjusted basic earnings per share represents adjusted profit after tax divided by the weighted average number of shares outstanding in the period.
4 The second interim dividend will be paid on 2 November 2018 to shareholders on the register as at 12 October 2018. The ex-dividend date is 11 October 2018. The final dividend will be paid on 14 December 2018 to shareholders on the register as at 23 November 2018, subject to approval by shareholders at the Group's AGM on 5 December 2018. The ex-dividend date is 22 November 2018.
The financial information set out in this annual results release does not constitute the Group's statutory accounts for the year ended 30 June 2018 or 2017. Statutory accounts for the year ended 30 June 2017 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The financial information for the year-ended 30 June 2018 is unaudited. The statutory accounts for the year ended 30 June 2018 will be delivered to the Registrar following the Group's annual general meeting.
The 2018 Annual Report and Accounts will be published in October 2018 and a copy will be posted on the Group's website.
This RNS has been approved on behalf of the Board.
Jonathan Dawson. Chairman, 24 September 2018.
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The announcement is also available on the company website via this link
For further information please contact:
River & Mercantile Group PLC +44 (0)20 3327 5100
Chris Rutt, Deputy CFO
Forward looking statements
This announcement contains forward looking statements with respect to the financial conditions, results and business of the Group. By their nature forward looking statements relate to events and circumstances that could occur in the future and therefore involve the risk and uncertainty that the Group's actual results may differ materially from the results expressed or implied in the forward looking statements. Nothing in this announcement should be construed as a profit forecast.
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