TIDMRIV
RNS Number : 6529B
River and Mercantile Group PLC
03 February 2020
3 February 2020
LEI: 2138005C7REHURGWHW31
River and Mercantile Group PLC
Second Quarter Trading Update
31 December 2019
River and Mercantile Group PLC (R&M), the asset management
and investment solutions business, today provides a trading update
for the three months and six months ended 31 December 2019.
Summary of the three months ended 31 December 2019:
-- Fee earning AUM/NUM increased in the quarter by 1.4% to GBP42.3bn.
-- In the quarter ended 31 December 2019:
- Gross Sales were GBP1.8bn;
- Net flows were GBP0.7bn;
- Net Sales ratio was 1.8% of opening AUM/NUM at 1 October 2019;
and
- Investment performance was negative GBP160m or 0.4% of opening
AUM/NUM.
Summary of the six months ended 31 December 2019:
-- Fee earning AUM/NUM increased in the six months by 6.2% to GBP42.3bn.
-- In the six months ended 31 December 2019:
- Gross Sales were GBP3.0bn;
- Net flows were GBP1.8bn;
- Net Sales ratio was 4.4% of opening AUM/NUM at 1 July 2019;
and
- Investment performance was positive across all Divisions,
adding GBP0.7bn or 1.8% of opening AUM/NUM.
James Barham, Group Chief Executive, commented:
This quarter has seen positive net sales for our Wholesale
business for the first time since the fourth quarter of 2017. This
reflects strongly on the team led by David Hanratty who joined the
business as Global Head of Distribution last year and demonstrates
the clear commitment to invest in the broader distribution
capabilities of the Group. I will discuss this in greater depth
along with our longer term plans when we announce our interim
results in early March.
The net sales ratio for the first half, which measures all
client flows, was 4.4% of opening AUM/NUM and the investment return
ratio added a further 1.8% of opening AUM/NUM. The combination of
net sales and investment performance has generated growth in
AUM/NUM of 6.2% in the first half. This is an encouraging outcome
at this stage and in line with our total growth rate target of 12%
pa.
In the first six months investment performance was positive
across all divisions adding GBP0.7bn in AUM. Again, we have seen
the benefits of having our Group divisions diversified in terms of
investment exposures with Fiduciary Management performing
particularly strongly in the first quarter whereas Equity Solutions
investment performance was stronger in the second.
Our view on markets continues to be positive with our River
FOURcast indicating Stable market conditions. We believe
expectations for economic growth will increase and credit
conditions strengthen, setting a supportive environment for asset
markets in general and equities in particular. Within equities,
conditions should favour value style investing, especially given
the attractive starting point.
Since the calendar year end, we have been appointed by a range
of additional clients which include a new Fiduciary client mandate
of GBP1.16bn (Fiduciary Management AUM: GBP630m and Derivatives
NUM: GBP530m). This mandate was signed in January and will
transition by the end of this quarter. We are delighted with this
appointment, which was based on both the strength of our investment
performance (Fiduciary Management annualised return of 10% since
2003) and the innovative solutions that we provide.
We are also beginning to see a growing pipeline of opportunities
more broadly across the business and we expect these to materialise
later in the year. In addition, we have seen a number of our
Solutions clients meet their objectives and following strong
investment outcomes are able to reduce their liabilities through
insurance. We see this as a positive client outcome in spite of the
negative impact on our underlying assets under management or
advice.
Assets Under Management (AUM) and Notional Under Management
(NUM)
AUM/NUM for the three months ended 31 December 2019.
Equity Solutions
------------------------------------
Fiduciary Derivative TOTAL
Management Solutions Wholesale Institutional Total AUM/NUM
----------- ----------- ---------- -------------- ------ ----------
(AUM) (NUM) (AUM) (AUM) (AUM)
Opening 13,744 22,754 1,403 3,795 5,198 41,696
Sales 111 1,425 78 200 278 1,814
Redemptions (248) (643) (75) (115) (190) (1,081)
Net rebalance and
transfers 4 3 - - - 7
Net flow (133) 785 3 85 88 740
Investment performance (489) - 88 240 328 (161)
Fee earning
AUM/NUM 13,122 23,539 1,494 4,120 5,614 42,275
=========== =========== ========== ============== ====== ==========
Mandates in - - - - - -
transition
(31 December 2019)
Redemptions in
transition
(31 December 2019) (360) (483) - - - (843)
Mandated AUM/NUM 12,762 23,056 1,494 4,120 5,614 41,432
=========== =========== ========== ============== ====== ==========
Increase/(decrease) in
fee earning assets (4.5%) 3.4% 6.5% 8.6% 8.0% 1.4%
Increase/(decrease) in
mandated assets (7.4%) 0.4% 6.5% 8.6% 8.0% (1.6%)
AUM/NUM for the six months ended 31 December 2019.
Equity Solutions
------------------------------------
Fiduciary Derivative TOTAL
Management Solutions Wholesale Institutional Total AUM/NUM
----------- ----------- ---------- -------------- ------ ----------
(AUM) (NUM) (AUM) (AUM) (AUM)
Opening 12,864 21,683 1,482 3,785 5,267 39,814
Sales 271 2,339 115 276 391 3,001
Redemptions (493) (1,418) (200) (203) (403) (2,314)
Net rebalance and
transfers 136 935 - - - 1,071
Net flow (86) 1,856 (85) 73 (12) 1,758
Investment performance 344 - 97 262 359 703
Fee earning AUM/NUM 13,122 23,539 1,494 4,120 5,614 42,275
=========== =========== ========== ============== ====== ==========
Mandates in - - - - - -
transition
(31 December 2019)
Redemptions in
transition
(31 December 2019) (360) (483) - - - (843)
Mandated AUM/NUM 12,762 23,056 1,494 4,120 5,614 41,432
=========== =========== ========== ============== ====== ==========
Increase/(decrease) in
fee earning assets 2.0% 8.6% 0.8% 8.9% 6.6% 6.2%
Increase/(decrease) in
mandated assets (0.8%) 9.7% 0.8% 8.9% 6.6% 5.8%
Included in Fiduciary Management and Derivative Solutions
redemptions in the six months ended 31 December 2019 are GBP314m of
client assets that went to buy out or buy in.
Redemptions in transition in Derivative Solutions represent
structured equity transactions with contractual maturity dates in
the next 3 months. Redemptions in transition in Fiduciary
Management represents a redemption from the River and Mercantile
Dynamic Asset Allocation Fund.
Performance and advisory fees
For the three months ended 31 December 2019, performance fee
revenues are estimated to be GBP0.6m, all from Fiduciary
Management. For the six months ended 31 December 2019 performance
fees aggregate approximately GBP1.1m. Our current estimate of
performance fees for the six months ending 30 June 2020 is
approximately GBP2.0m.
Advisory fee revenues for the quarter ended 31 December are
estimated to be GBP3.0m.
Notes to editors:
R&M is an asset management and investment solutions business
with a broad range of services, from consulting and advisory, to
fully delegated fiduciary management and asset management.
R&M is focussed on creating investment solutions for
institutional pension schemes, insurance and financial
intermediaries.
River FOURcast is a proprietary economic model developed by
R&M which is used to indicate our future views of the financial
markets. The model uses a number of economic and sentiment
indicators to determine the potential future direction of financial
markets as being: "STABLE", "UPWARD RERATING", "APPREHENSION" or
"DOWNTURN".
For further information, please contact:
River and Mercantile Group PLC
Kevin Hayes
Chief Financial Officer
Tel: +44 (0)20 3327 5100
Forward-looking statements
This announcement contains forward-looking statements with
respect to the financial conditions, results and business of
R&M. By their nature, forward-looking statements involve risk
and uncertainty because they relate to events and depend on
circumstances that will occur in the future. R&M's actual
results may differ materially from the results expressed or implied
in these forward-looking statements. Nothing in this announcement
should be construed as a profit forecast.
Notes:
Assets Under Management (AUM) represents the assets over which
we act either as a discretionary investment manager on a partial or
fully delegated basis in accordance with an investment management
agreement.
Fee earning AUM/NUM represents amounts on which management fees
and performance fees are charged.
Notional Under Management (NUM) represents the aggregate billing
notional of derivative contracts and is the basis on which
management fees are charged.
Net rebalance and transfers represents the net change in billing
notional values of Derivatives (including Gilts) from existing
client mandates and can increase or decrease based on changes in
the underlying hedging strategies.
The category also represents transfers of client assets between
divisions. The different billing structures between divisions,
including the use of AUM or NUM, means that transfers will not net
to zero.
Net Sales Ratio represents gross sales, redemptions, net
rebalance and transfers divided by opening AUM/NUM
Net Investment Ratio represents investment performance divided
by opening AUM/NUM.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTWPUAGGUPUGRG
(END) Dow Jones Newswires
February 03, 2020 02:00 ET (07:00 GMT)
Grafico Azioni River And Mercantile (LSE:RIV)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni River And Mercantile (LSE:RIV)
Storico
Da Apr 2023 a Apr 2024
