Half year results statement 2020
A strong first half.
Paul Stockton, chief executive, said:
"An acceleration of net inflows in the second quarter helped our funds under management and administration reach £49.4 billion at 30 June 2020, down 2.0% over the half year against a backdrop where the FTSE 100 index decreased by 18.2%. Total net inflows were £1.3 billion in the first half, representing an annualised growth rate of 5.3%, while Investment Management generated annualised net organic growth of 1.4%. Our Unit Trusts business delivered another outstanding performance with net inflows of £0.6 billion, 68.7% ahead of the first half of 2019, with funds under management growing by 20.0% to £8.0 billion at 30 June 2020.
Underlying profit margins remained resilient as our business model responded strongly to the challenges of the COVID-19 pandemic whilst also creating opportunities to leverage the advantages of remote working and streamlining procedures. We continue to prioritise the safety and well-being of our employees and remain dedicated to delivering a high-quality client service.
Our strong first half performance is testament to the strength of our brand, our market position and our people. Our business model has proven to be resilient, agile and adaptable throughout the duration of the COVID-19 pandemic, with little to no impact on business continuity. Whilst we expect investment markets to remain volatile and interest rates to remain lower for some time to come, our balance sheet is robust with a strong capital position. We are well placed to continue delivering on our organic growth strategy, balancing investment in the business with prevailing market conditions, maintaining strict cost discipline and identifying inorganic growth opportunities that fit our culture.”
- Total funds under management and administration reached £49.4 billion at 30 June 2020, down 2.0% from £50.4 billion at 31 December 2019 (30 June 2019: £49.2 billion). The FTSE 100 Index and MSCI PIMFA Private Investor Balanced Index decreased 18.2% and 6.3% respectively over the six-month period to 30 June 2020.
- £41.4 billion in the Investment Management business (30 June 2019: £42.5 billion)
- £8.0 billion in the Unit Trusts business (30 June 2019: £6.7 billion)
- Total net inflows were £1.3 billion in the first six months of 2020 (30 June 2019: £0.5 billion), representing an annualised growth rate of 5.3% (30 June 2019: 2.1%).
- Total net inflows in Investment Management were £0.8 billion in the first six months of 2020 (30 June 2019: £0.1 billion). Net organic inflows in the first half of the year totalled £0.3 billion (30 June 2019: net outflows of £0.1 billion).
- Net inflows in Unit Trusts were £0.6 billion in the first half of 2020 (30 June 2019: £0.3 billion).
- Profit before tax for the six months to 30 June 2020 of £27.3 million (30 June 2019: £20.0 million). Basic earnings per share totalled 36.1p (30 June 2019: 25.8p).
- Operating income totalled £179.0 million in the first half of 2020, 3.6% ahead of the prior year (30 June 2019: £172.7 million).
- Income in Investment Management totalled £158.7 million in the first six months of 2020, an increase of 2.3% on the prior period (30 June 2019: £155.2 million). The average FTSE 100 Index level on quarterly billing dates in 2020 was 5793, a decrease of 22.1% against the 7436 recorded in 2019.
- Income in Unit Trusts totalled £20.3 million in the six months ended 30 June 2020, an increase of 16.0% on the £17.5 million reported in the first half of 2019.
- Underlying profit before tax totalled £46.0 million in the first six months of 2020 (30 June 2019: £46.6 million). Underlying earnings per share totalled 67.5p (30 June 2019: 71.4p).
- Underlying operating margin of 25.7% in the six months ended 30 June 2020 (30 June 2019: 27.0%; 31 December 2019: 25.5%)
Declaration of interim dividend
- We are maintaining our interim dividend at 25p (30 June 2020: 25p). This reflects our confidence in our medium-term prospects and the strength of our balance sheet. The record date will be 4 September 2020 and the dividend will be paid on 6 October 2020.