27th Feb 2015 11:33
LONDON (Alliance News) - River and Mercantile Group PLC, an advisory and investment management business, Friday warned that the UK's upcoming General Election presents risks to pensions, which have been reformed by the current government in a way designed to give people more control of their finances in retirement, as it reported a swing to first-half pretax profit.
Uncertainty surrounding the General Election is giving the jitters to the financial services industry, which is wary of a change in political power. The current government, a coalition between the Conservative Party and the Liberal Democrats, introduced big reforms last year that have driven interest in pensions and savings.
"The looming May election is generally recognised as being too complex to predict, but pensions policy will have an unprecedented political profile, perhaps inevitably given our ageing society," Paul Bradshaw, non-executive chairman, said in a statement.
"Some of the minority parties have radical views on pensions, and we may see yet more short-term fundamental change. It would be most unfortunate if the surge of interest in pensions unleashed by last year's reforms were negated by short-term political expediency, particularly given the current implementation challenges in much of the industry," Bradshaw added.
Nevertheless, Chief Executive Mike Faulkner said the group is well positioned to weather short and even medium term uncertainty, citing the growth expectations and diversity of the group's businesses.
The warning came as River and Mercantile reported a GBP5.3 million pretax profit in the six months to the end of 2014, compared with a GBP73,000 pretax loss in the corresponding period of the prior year, as revenue was bolstered by higher management, advisory and performance fees.
The group, which listed on the London Stock Exchange in June 2014 following the merger of P-Solve Ltd and River and Mercantile Asset Management LLP last March, reported net inflows of GBP729 million, while investment performance increased assets under management by GBP572 million.
Mandated assets under management increased by 5% to GBP18.9 billion over the course of the six months.
The group said it will pay a 4.6 pence per share interim dividend, with 1.0 pence of that amount being a special dividend due to net performance fees.
River and Mercantile shares were up 3.1% at 217.50 pence on Friday.
By Samuel Agini; [email protected]; @samuelagini
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