28th May 2024 15:33
(Alliance News) - Intermediate Capital Group PLC on Tuesday posted better-than-expected annual results and the asset manager upped its payout.
The London-based firm said pretax profit more than doubled to GBP597.8 million in the financial year that ended March 31, from GBP258.1 million the year prior.
Fee-earning assets under management were up 11% to USD69.7 billion from USD62.8 billion.
Management fee income rose 5.0% to GBP505.4 million from GBP481.4 million, while performance fee income surged to GBP73.7 million from GBP19.6 million.
Net asset value per share was 801 pence on March 31, up 15% from 694p a year prior. Net investment return more than tripled to GBP379.3 million from GBP102.3 million.
ICG proposed a final dividend of 53.2p, up 1.9% from 52.2p a year before, upping its total payout by the same 1.9% to 79.0p from 77.5p.
ICG said: "We are actively supporting our portfolio companies as they seek to take advantage of current market dislocation by growing organically and inorganically, as well as ensuring that they have the people, systems, and capital structures in place to navigate a period of potentially protracted uncertainty, including to ensure they are appropriately hedged against interest rate risks. Our portfolios remain fundamentally well positioned, with robust operational performance and reasonable leverage."
Looking ahead, ICG acknowledged that "heightened geopolitical risk, high interest rates and weak economic growth" means the current investing environment is uncertain, and potentially volatile.
However, the firm backed its "expertise" in navigating "complex and uncertain market conditions".
Analysts at Peel Hunt noted pretax profit for the year 23% above consensus, and revenue beat by 5.5%.
"The investment company pretax profit of GBP223 million [versus a loss of GBP53 million in financial 2023] was also well ahead of consensus GBP152 million, although we note a one-off gain of GBP60 million," Peel added.
"These results further reset the expectations for ICG, and we reiterate our buy recommendation."
Panmure Gordon also rates the stock at 'buy'. It said there was "lots to like" in ICG's annual results, but provided a caveat.
"We have been long-standing fans of Intermediate Capital and argued strongly that the business was materially undervalued when the market was attaching no value to the balance sheet which cornerstones growth expectations. It was a top pick in our coverage long before it became the nap stock of so many others this year," Panmure said.
"We still see very much to admire in the company: its expose to private markets; the longevity of its client relationships; the closed-end nature of the majority of its products. It is not, however, nearly as 'cheap' as once it was. A re-rating was much deserved and long overdue, but with it comes its own risks."
Panmure summarised: "Simply that the investment case is different at the current share price than it was a year ago when the shares were 1,300p."
ICG shares rose 2.3% to 2,374.00p each in London on Tuesday afternoon.
By Eric Cunha, Alliance News news editor
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