Anchor attracts more fixed income investment


Anchor attracts more fixed income investment

Published Date: 2019-09-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

Anchor attracts more fixed income investment

The asset manager and stockbroker has grown assets strongly since December due to a shift to safe interest rate products.

Anchor Group says proactive marketing and a big focus on clients has helped it overcome the most difficult investment environment in decades. The JSE Capped SWIX (shareholder weighted index) fell 6.7% in the first six months of the year and trading volumes on the exchange declined by 39%. That's bad for the JSE's own revenue, as well as stockbrokers buying and selling shares on the market.

Despite the current volatility, Anchor attracted strong inflows in assets under management, the most important metric in its business. It grew assets under management and advice by 11% to R54.4 billion between December and June and said its pipeline of new assets was at its highest ever. It also expects inflows in the second half of the year to beat the first half as it benefits from a shift to fixed-income investments at the expense of equities. It saw record fixed-income inflows over the period, which are lower margin business than equities.

The group's other divisions include Private Clients and Stockbroking. As a result of the big decline in equity market volumes, brokerage revenues and profitability declined. But revenue from annuity management fees grew.

Turnover increased by 13% to R268 million in the six months to end-June but was 7% lower on a like-for-like basis. Earnings per share (EPS) jumped 150% to 47.4c from a 95.8c loss a year earlier and headline EPS rose 158% to 47.4c. It said the most meaningful financial measure of its performance was the R36.8 million of adjusted core headline earnings, down 11% from a year earlier but up 5% on the R35.1 million it earned in the second half of last year. Adjusted headline earnings are calculated to reflect core and sustainable cash-flow earnings of the group. This number is used as the basis to determine its dividend cover.

Adjusted HEPS declined 14% to 18c. It had cash and cash equivalents and short-term investments of R172 million at the end of the period, up 19%. It's trimmed its interim divided by 14% to 9c per share.

Its shares closed unchanged at R3.80. The results were released shortly before the close of trade.

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