DURBAN - Coronation Fund Managers share price leapt by more than 6 percent on the JSE yesterday morning after the asset manager reported an 8 percent increase in profits for the six months to end March and delivered a dividend, boosted by a short-term performance in its portfolio.
Profit for the period increased to R624million, up from R578m and revenue also was up by 8percent to R1.77 billion compared to last year's R1.63bn. The group declared an interim dividend of 178c.
Chief executive Anton Pillay said while it was impossible to ignore the immediacy, depth and duration of the economic impact, a very real human tragedy sat at the heart of these extraordinary times. “Despite this unparalleled environment, Coronation’s revenue is up 8percent and net profit is up 8percent year-on-year from end-March 2019. This can be attributed to improved relative short-term performance in our portfolios and tight cost control,” Pillay said.
He added that while short-term performance was encouraging, especially within the domestic and global equity portfolios, the long-term performance across portfolios remained excellent. However, the group said the Covid-19 pandemic has impacted financial markets with a swiftness and ferocity normally only seen in a classic financial crisis, pushing the world economy into a recession.
As a result, Coronation pointed out that key asset classes included in its client portfolios were down, with the All Share Index declining by 17.7percent and the All Bond Index down by 7.1percent, while the MSCI All Country World Index and MSCI Emerging Markets Index returned 0.3percent and 0.8percent in rand, respectively, during the six-month period.
Coronation’s total assets under management declined by 11percent to R508bn, compared to September 2019 of R571bn. Its diluted and basic headline earnings per share increased by 8percent to 178.3 cents a share, up from 165.1c compared to last year.
In the institutional business division, the group manages R292bn on behalf of South African and global institutions. But, the figure was down by 11.78percent compared to R331bn reported at the end of September.
In South Africa, Coronation manages R224bn assets under management in the local retirement fund industry while it manages R68bn for global clients. In the retail business division, the group said with retail assets totalling R216bn it is a leading independent manager of South Africa’s household savings and investment pool.
The share price rose to R39.78 a share after the release of the results. However, it shed some of the gains in the afternoon before closing at R37.73.
BUSINESS REPORT ONLINE