15th Mar 2016 11:35
LONDON (Alliance News) - Charlemagne Capital Ltd, the AIM-listed emerging and frontier markets asset manager, on Tuesday said its pretax profit dropped in 2015, as its assets under management dropped by USD351 million due to weak emerging markets and net outflows of client money.
Pretax profit fell to USD450,000 in 2015, the company said in a statement, from USD3.1 million in 2014, as revenue fell to USD24.8 million from USD28.5 million. Assets under management fell to USD1.90 billion from USD2.25 billion, hit by a decrease in market values of USD216 million and net outflows of USD135 million.
Charlemagne declared a second interim dividend of 0.5 cents per share, adding to a 0.5 cents first interim dividend previously paid to shareholders. The total dividend fell from 1.5 cents declared for 2014.
With USD17.7 million held in cash, Charlemagne said it is "well positioned" for a recovery in emerging markets, supported by a "strong operational base offering significant capacity for future growth in assets under management".
"Emerging markets declined by 14.9% in US dollar terms over 2015, impacted by a particularly volatile third quarter and the continued weakness of underlying currencies. In total, industry-wide outflows from Emerging Markets funds for 2015 rose to USD73 billion, a marked increase compared with the USD25 billion the previous year. The asset class has now underperformed developed markets for the last five years and produced negative market returns for the last three years," Chief Executive Jayne Sutcliffe said in a statement.
"Overall our assets under management and consequently, our revenues have been impacted by the deterioration of values in the emerging markets. The environment will remain challenging until sentiment improves and we see some recovery in the markets," she added.
Net profit increased to USD2.3 million in 2015, from USD1.5 million, due to a tax refund of USD3.2 million, following an agreement with HM Revenue & Customs in March 2015. "Under the terms of the settlement agreement contributions to the Charlemagne Employee Benefit Trust made in previous years have now been allowed as a deduction from taxable income in respect of those years of assessment..." Charlemagne Capital said.
The matter related to an employee benefit trust created in 2005, controlled by an independent trustee, in a move to "motivate and retain" directors and employees.
Shares in Charlemagne were down 1.1% at 9.40 pence on Tuesday morning.
By Samuel Agini; [email protected]; @samuelagini
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