Ninety One hampered by Covid-19


Ninety One hampered by Covid-19

Published Date: 2020-05-21 | Source: Stephen Gunnion | Author: Stephen Gunnion

Ninety One hampered by Covid-19

The maiden results from the asset manager following its recent demerger from Investec were marred by the recent Covid-19 market correction.

Ninety One says the Covid-19 induced market correction in March took the shine off a strong investment performance for the rest of the year.

In its first results since demerging from Investec and listing on the London and Johannesburg stock exchanges in the middle of March, Ninety One said while the one-year outperformance of its funds sat at 81% in December, the situation deteriorated to the extent that its aggregate performance looked "decidedly average" over one and three years at 39% and 55% respectively. Value investment strategies had a particular tough time in March, the fund manager said. However, other global and emerging markets equity strategies delivered good results. Its SA domestic strategies also reported strong performances.

Against a very challenging background for the active investment industry, Ninety One said it achieved net inflows in line with the prior year. The flows were mainly driven by its fixed income and specialist equities offerings. The positive net inflows of £6 billion were offset by the negative market movements in March, with the result that assets under management declined by 7% to £103 billion from a year earlier.

For the year, adjusted operating revenue increased by 9% to £588 million and adjusted operating profit rose 10% to £190 million. Profit after tax came in 12% higher at £156 million and headline earnings per share were up by the same margin at 16.8 pence. The fund manager made an early payment of dividends in March ahead of its demerger. Going forward, it expects to target an ordinary dividend ratio of at least 50% of its profit after tax.

While it expected the appetite for risk assets to increase over time as the extreme volatility recedes, it said revenue pressure was expected to continue in the coming period.

Ninety One Limited's shares rose 11% to R47 yesterday while London-listed Ninety One Plc were 11% higher at R46.59.

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