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Mercia Asset posts higher assets but turns to loss amid high inflation

2nd Jul 2024 11:57

(Alliance News) - Mercia Asset Management PLC on Tuesday reported a swing to a loss amid high interest rates, high inflation and market volatility, but celebrated "record fund inflows".

The alternative asset manager reported assets under management at its March 31 year-end climbed 27% to GBP1.82 billion from GBP1.44 billion a year prior.

Revenue in the year improved 18% to GBP30.4 million from GBP25.9 million.

However, Mercia swung to a pretax loss of GBP8.2 million from a profit of GBP2.4 million.

Hurting its bottom line, it announced a GBP17.3 million hit from the fair value movement in direct investments, compared to a boost of GBP1.2 million a year prior.

Further, administrative expenses increased 20% to GBP24.9 million from GBP20.7 million.

Chief Executive Officer Mark Payton said: "The year to 31 March 2024 was characterised by market volatility, high inflation and high interest rates driving up the costs of doing business, alongside geopolitical uncertainty and a thankfully short-lived recession.

"It is therefore pleasing to have come through these universal headwinds with record organic growth in our assets under management, driven by Mercia's diversified and differentiated approach to making a positive impact for our investors and investees."

Mercia Asset Management reported "record fund inflows" of GBP562 million during the year, something it achieved during "another year of subdued inflows by the asset management sector".

The company proposed a final dividend of 0.55 pence per share, up 3.8% from 0.53p a year prior. This brings the total payout to 0.90p, up 4.7% from 0.86p.

Looking ahead, Mercia said it is its intention to "now focus on its profitable and fast-growing funds under management".

"The board will propose a resolution at the 2024 annual general meeting that Mercia reclassifies as a trading company and ceases to be an investing company under the AIM rules," it adds.

Mercia shares rose 3.9% to 32.20 pence each on Tuesday morning in London.

By Tom Budszus, Alliance News slot editor

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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