17th Mar 2021 13:11
(Alliance News) - Fund manager River & Mercantile Group PLC on Wednesday reported declines in half-year revenue and profit, with management planning cost-cutting exercises to improve margins.
Shares were up 1.5% to 206.00 pence in London, after earlier rising as much as 4.9%.
Revenue for the half year that ended December 31 fell 6% year-on-year, to GBP34.3 million from GBP36.3 million. Pretax profit fell 19% to GBP4.6 million from GBP5.7 million.
The overall payout for the half was cut to 3.89p per share from 4.39p per share last year. The ordinary dividend is being maintained, but the company is not paying a special dividend after a 0.5p special dividend a year ago.
Assets under management increased 3.4% since June 2020 to GBP45.7 billion, but this was mainly because of investment performance as net flows were broadly flat, River & Mercantile said.
The company plans to cut costs following a period of investment in distribution, and said it will update the market "in due course".
"We are now redoubling our focus on improving our profitability through a series of cost cutting exercises to ensure that we return our core underlying margin to previous levels," Chief Executive James Barham said.
River & Mercantile said it expects its financial performance to improve in the medium term. It sees the release of pent-up demand after June, after the end of the Competition & Markets Authority's process for pension schemes to retender fiduciary management contracts.
The board is "very conscious of the continuing weak share price" and is determined to address it, the company said. Shares are up 20% year-to-date, but remain some way off their 2018 peak of over 380p.
"We believe we have made the right investments in people to enable River & Mercantile to take advantage of the attractive growth opportunities that we have identified, to continue to deliver strong investment returns for our growing client base, and to provide longer-term value to shareholders," Barham said.
By Ivan Edwards; [email protected]
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