11th Mar 2019 09:35
LONDON (Alliance News) - River & Mercantile Group PLC on Monday said its profit dropped in the first half of its financial year, largely resulting from a bargain purchase the year before.
In addition, the company declared an interim dividend of 6.3 pence per share, of which 2.0p per share is a special dividend. This is 17% less than its 7.6p per share dividend the year before.
For the six months to December 31, the advisory and investment firm posted a pretax profit of GBP9.0 million, down 18% from GBP11.0 million the year before.
River & Mercantile attributed much of this to its acquisition of the Emerging Markets Industrial Lifecycle team from Credit Suisse the year before, for which it recorded a GBP1.8 million bargain purchase on its income statement that was didn't recur.
Furthermore, total expenses increased to GBP30.7 million from GBP29.8 million.
Revenue came to GBP39.1 million, essentially flat from GBP39.0 million. Of this, net management fees were up 4.5% at GBP27.9 million versus GBP26.7 million, while performance fees were down 12% at 6.6 million versus GBP7.4 million.
Fee earning assets under management and notional under management stood at GBP34.2 billion on December 31, compared to GBP32.6 billion the year before and GBP33.8 billion on June 30.
Growth in fee earning income for the six month period was 1%, compared to 5% growth in the year-ago period.
River & Mercantile Chief Executive Mike Faulkner said: "Whilst this has been a difficult period for markets and a more muted one for the group as a result, our overall [assets under management and notional under management] has proved comparatively resilient to negative equity market returns, as we would expect. We are delivering close to 30% margin on our business before investments, and are choosing to invest meaningfully in growth opportunities which we see. This does however have an impact on our margin when considered in total.
"We have an active product development pipeline, which we believe can be a significant source of future growth and is therefore strategically important.
"I continue to believe we are strongly positioned to keep growing. Opportunities in markets that should emerge in the near and medium term will offer us a chance to continue adding value for our clients and in doing so to significantly increase AUM/NUM."
Shares in River & Mercantile were down 1.5% at 240.25 pence on Monday morning.
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