TIDMHGG
RNS Number : 5337C
Henderson Group plc
02 May 2012
Annual General Meeting
2 May 2012
Henderson Group plc holds its 2012 Annual General Meeting
today.
The scripts for the opening addresses by the Chairman and the
Chief Executive are attached.
Part one: Henderson Group Chairman's address to Shareholders.
Part two: Henderson Group Chief Executive's address to Shareholders.
* * *
Henderson Group plc
47 Esplanade
St Helier
Jersey JE1 0BD
Registered in Jersey
No. 101484
ABN 67 133 992 766
Further information
www.henderson.com or
Investor enquiries
---------------------------------
Mav Wynn, Head of Investor Relations +44 (0) 20 7818 5135 or
---------------------------------
+44 (0) 20 7818 5310
---------------------------------
mav.wynn@henderson.com
or
---------------------------------
investor.relations@henderson.com
---------------------------------
Bojana Flint, Deputy Head of Investor +44 (0) 20 7818 6117
Relations bojana.flint@henderson.com
---------------------------------
Media enquiries
---------------------------------
Richard Acworth, Head of Corporate +44 (0) 20 7818 3010
Communications richard.acworth@henderson.com
---------------------------------
United Kingdom: Maitland Australia: Cannings
---------------------------------
Peter Ogden/George Trefgarne Luis Garcia
---------------------------------
+44 (0)20 7379 5151 +61 (0)2 8284 9911
---------------------------------
Chairman's address
During 2011, the Henderson business rose to some significant
challenges, ranging from delivering a transformational acquisition
to weathering further economic turmoil. Although the year started
on a positive note, it was soon overshadowed by the Japanese
earthquake in March, softer economic data from the US and the
sovereign debt crisis in the eurozone. Understandably, investors
became more cautious and most equity markets ended the year down.
Despite these events, Henderson delivered a strong result with
underlying profit up 58%, primarily as a result of the Gartmore
acquisition and helped by our continued ability to manage
costs.
The strategic and financial rationale for acquiring Gartmore was
overwhelming. Furthermore, the business was a great fit and the
subsequent integration has gone well. The level of assets and
number of clients retained were above our targets and the
integration was completed ahead of schedule. This acquisition has
strengthened two areas of strategic importance to us, retail and
absolute return. We also added to our core investment capabilities,
such as Global and Emerging Market Equities, and we have expanded
our distribution reach, in particular in Japan. The value we were
able to extract from this acquisition helped improve our underlying
earnings per share by 30%.
In line with our strategic objectives, we also sold a number of
non-core businesses last year. These included the transfer of our
liquidity fund, the sale of New Star Institutional Managers Limited
and the disposal of our interest in a Hermes Gartmore private
equity fund of funds joint venture. As a result, we are a more
focused business, in a stronger position to deliver long term value
for our shareholders.
On dividends, in line with our progressive policy, the Directors
are recommending a final dividend for 2011 of 5.05 pence per share.
This will bring the total dividend for 2011 to 7 pence per share,
8% higher than the total dividend paid for 2010. The proposed final
dividend will be paid on 25 May to shareholders who are on the
share register on 4 May. We will continue to apply our formula so
that the next interim dividend will be 30% of the total dividend
for the previous year - subject of course to us having the
resources to make the payment.
We had a few changes to the Board's composition last year with
three new Directors joining the Board. Kevin Dolan brings his
extensive international experience gathered over the past 32 years
from his executive and non-executive roles in financial services.
Two of our executives also joined the Board. James Darkins,
Managing Director of Property, and David Jacob, Managing Director
of Henderson Investment Management and Chief Investment Officer.
They have been with the Group for 14 and seven years respectively.
Furthermore, Gerry Aherne, who has been a Director for over seven
years and Chairman of the Remuneration Committee since 2005, will
stand down as a Director today. Gerry, thank you for your advice
and experience that you brought and I wish you well for the future.
Tim How will chair and Duncan Ferguson will join the Remuneration
Committee.
Looking ahead, it is hard to see a speedy conclusion to the
eurozone debt crisis and I expect that the financial services
industry will continue to experience political and regulatory
uncertainty. That said, we are well placed to manage the business
through choppy waters, by concentrating on those areas we can
control. We will continue to manage our costs carefully, but have
retained the flexibility to invest to protect and expand our
business. We will focus on investment performance and building our
distribution network. Finally, we will continue to offer a
portfolio of attractive products that meet or exceed the
expectations of our clients.
The Board, the management team and staff are determined to
ensure Henderson thrives for the long-term benefit of our
shareholders and our clients. As always, I would like to take this
opportunity to thank our staff for their outstanding work.
Chief Executive's address
One of the most noticeable developments in 2011 was the
increasing influence of political events on capital market
behaviour. This different dimension generated further volatility
and uncertainty, most notably in the eurozone. These political
ramifications have a disproportionate influence over the investment
universe, making the challenge for investment managers even
greater.
Around the world, regulatory bodies are working through an
unprecedented number of initiatives to shore up the infrastructure,
transparency, competence and reputation of the financial services
industry. In the UK, the primary focus remains on protecting
consumers' best interests by introducing regulation such as the
retail distribution review, new safeguards for client assets and
increased governance requirements around the life cycle for retail
products. European regulators are concentrating on directives
aiming to increase market transparency, reduce systemic market risk
and boost consumer protection. New requirements for alternative
products are still under development. US regulations such as
Dodd-Frank and the Foreign Account Tax Compliance Act will also
bring a number of new obligations for which significant preparation
will be necessary. Henderson is working hard preparing for these
changes and we are well placed to implement them within the
timeframes of the legislation.
Against a volatile market environment and the significant
regulatory initiatives underway, Henderson capitalised on
opportunities, most notably the combination with Gartmore in April.
We made good progress in 2011 on our key strategic objectives,
including growing our retail and absolute return businesses,
managing our cost base and extracting efficiencies from combining
Gartmore with Henderson. The Chairman has highlighted the success
of the Gartmore acquisition and I echo his comments. Gartmore
wasn't the only corporate activity we focused on. With clear sight
on our central business priorities, we exited a number of non-core
businesses which has improved efficiency in the company.
In so doing, we produced a record financial result with
underlying profit before tax up 58% to GBP159 million and earnings
per share, on a diluted basis, up over 30% to 12.4 pence per share.
This is the strongest set of results we have reported since our
demerger from AMP in 2003.
The increase in income, driven largely by Gartmore, helped
improve the management fee margin by 11% to 53 basis points. Our
operating margin improved 21% to 36% as we integrated Gartmore at a
higher operating margin than our own, as well as the contribution
from higher performance fees and continued cost control.
Investment performance remained good over three years with 66%
of funds either meeting or exceeding their benchmarks. One year
figures suffered slightly following lower Property performance and
volatile markets in the second half of 2011.
Against what is a strong set of financial results I am however
disappointed with our net fund flows. Putting this into some
context, two-thirds of the outflows relate to the Henderson
Institutional book where we saw significant outflows from lower
margin accounts. That said, we have made a number of changes and
new hires, both in our distribution and fund management areas, to
help us achieve positive net fund flows.
As regards our financial strength, we continued to generate
positive operating cash flows and the net effect of debt
refinancing and the repayment of our 2012 bonds today, is that we
have maintained our prudent gearing ratios.
For Henderson, 2012 is more likely to be a period of
consolidation rather than continuing the pace we have experienced
in the recent past. Our focus is on creating long-term shareholder
value and in this regard we are undertaking a number of initiatives
which, whilst requiring some investment this year, will lay the
foundation for growth in future years. These include making sure
all at Henderson have the client front and centre of their mind. We
will seek to improve our retail market share in the UK, Continental
Europe and the US whilst developing our franchise in Asia Pacific
and Latin America. We are actively developing and expanding our
global and absolute return product ranges. As always we will
maintain our vigilance on making sure we operate efficiently.
As regards our business performance so far this year, even
though equity markets have been higher than at the beginning of the
year, continued market volatility and economic uncertainty has kept
investor demand for risk assets subdued. Our investment performance
is strong over one and three years and I am encouraged by the
positive net flows in our European retail book. Flows elsewhere in
the business have not been rebounding as quickly as I would like
however, whilst we cannot influence macro conditions, the
initiatives I mentioned earlier are designed to help improve
these.
By staying close to our clients and partners and delivering
strong investment returns and excellent service, we are confident
that we can make this a better, more efficient business. We believe
we are in good shape and despite this ongoing market volatility, I
remain confident about the outlook for Henderson.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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