29th Oct 2009 07:00
Interim Management Statement
29 October 2009
Henderson Group plc ('Henderson Group' or 'the Group') is today publishing its second Interim Management Statement for 2009, in accordance with the EU Transparency Directive and revised UK Listing Authority rules. Unless otherwise stated, the comments below refer to the third quarter of the current financial year, representing the period from 1 July 2009 to 30 September 2009 ('the period').
Key points
Assets under management ('AUM') increased 9% in the period to £57.7 billion.
Strong investment performance across a broad range of Listed Assets products with 81% of funds outperforming over one year.
Net inflows of £0.3 billion into higher margin products offset by £0.3 billion outflows from lower margin products and £1.2 billion from Pearl.
Positive market and foreign exchange rate movements of £5.9 billion.
Strengthened our sales and distribution team to support the improved outlook for markets.
Well positioned to take advantage of further opportunities.
Commenting on the Interim Management Statement, Andrew Formica, Henderson Group's Chief Executive said: "Conditions across most markets and asset classes have continued to improve during the period and, together with good investment performance, have led to increased client demand for our products. This, supported by a healthy pipeline of client commitments, the diversity of our revenues and prudent management of our resources, makes us confident of delivering on our business and strategic objectives.
We remain committed to providing clients with more valuable investment products. Generating profitable organic growth continues to be our primary focus. That said, where we see other opportunities, at attractive prices, to extend our product offering and build market share, we will seek to take advantage of them."
Henderson Group plc
47 Esplanade
St Helier
Jersey JE1 0BD
Registered in Jersey
No. 101484
ABN 67 133 992 766
Fund flows and AUM for Henderson Global Investors ('Henderson')
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1 Jul - 30 Sep 2009 |
1 Jan - 30 Sep 2009¹ |
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£bn |
Opening AUM
1 Jul |
Net flows 1 Jul - 30 Sep |
Market/ FX 1 Jul - 30 Sep |
ClosingAUM 30 Sep |
Opening AUM 1 Jan |
New Star take-on 9 Apr |
Net flows 1 Jan - 30 Sep |
Market/ FX
1 Jan - 30 Sep |
ClosingAUM 30 Sep |
|
Higher margin |
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|
Investment Trusts |
2.8 |
- |
0.6 |
3.4 |
2.7 |
0.1 |
- |
0.6 |
3.4 |
|
Horizon funds |
2.6 |
0.1 |
0.5 |
3.2 |
2.3 |
- |
0.4 |
0.5 |
3.2 |
|
UK Wholesale |
8.1 |
- |
1.5 |
9.6 |
3.1 |
4.7 |
- |
1.8 |
9.6 |
|
US Wholesale |
2.3 |
0.2 |
0.4 |
2.9 |
2.3 |
- |
0.1 |
0.5 |
2.9 |
|
Hedge funds |
0.7 |
0.1 |
0.1 |
0.9 |
0.8 |
0.1 |
(0.2) |
0.2 |
0.9 |
|
Property (UK/Europe) |
7.2 |
- |
(0.1) |
7.1 |
7.6 |
0.5 |
(0.4) |
(0.6) |
7.1 |
|
Property (US) |
1.3 |
- |
0.1 |
1.4 |
1.7 |
- |
- |
(0.3) |
1.4 |
|
Private Equity |
0.9 |
- |
(0.3) |
0.6 |
1.2 |
- |
- |
(0.6) |
0.6 |
|
Structured Products |
1.8 |
(0.1) |
0.2 |
1.9 |
2.2 |
- |
(0.2) |
(0.1) |
1.9 |
|
Total higher margin |
27.7 |
0.3 |
3.0 |
31.0 |
23.9 |
5.4 |
(0.3) |
2.0 |
31.0 |
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Lower margin |
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Institutional |
14.4 |
(0.1) |
1.8 |
16.1 |
14.1 |
0.2 |
0.6 |
1.2 |
16.1 |
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NSIM² |
2.4 |
(0.2) |
0.4 |
2.6 |
- |
2.5 |
(0.4) |
0.5 |
2.6 |
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Total lower margin |
16.8 |
(0.3) |
2.2 |
18.7 |
14.1 |
2.7 |
0.2 |
1.7 |
18.7 |
|
44.5 |
- |
5.2 |
49.7 |
38.0 |
8.1 |
(0.1) |
3.7 |
49.7 |
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Pearl |
8.5 |
(1.2) |
0.7 |
8.0 |
11.5 |
- |
(4.0) |
0.5 |
8.0 |
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Total AUM |
53.0 |
(1.2) |
5.9 |
57.7 |
49.5 |
8.1 |
(4.1) |
4.2 |
57.7 |
¹ Year-to-date flows, market and currency movements are adjusted to reflect rounding differences.
² New Star Institutional Managers.
Favourable market and currency movements of net £5.9 billion, partially offset by net fund outflows of £1.2 billion during the period, brought total AUM to £57.7 billion at 30 September 2009, 9% higher than at 30 June 2009 (£53.0 billion). Market and currency movements across the business were favourable despite unfavourable movements in UK and Europe Property (£0.1 billion), largely as a result of currency movements, and Private Equity (£0.3 billion), as a result of the revaluation of one fund³.
Higher margin net inflows were £0.3 billion during the period consisting of £0.3 billion into the Wholesale business (£0.2 billion US Wholesale and £0.1 billion Horizon) and £0.1 billion into Hedge funds partially offset by a £0.1 billion outflow from Structured Products. Encouragingly, following the acquisition of New Star Asset Management Group PLC ('New Star') in April 2009, flows in our combined Henderson New Star UK Wholesale business have stabilised during the period. Our other higher margin businesses were also stable during the period. During October we have seen continued client demand, particularly across our Wholesale funds. Following the acquisition of New Star, we have launched our first UK wholesale fund under our combined Henderson New Star business. The European Special Situations fund managed by Richard Pease has, since its launch on 1 October 2009, attracted around £50 million. Given the improving flows in our Wholesale business, we have strengthened our sales and distribution capability representing our UK, pan-European and US wholesale ranges.
In Property, modest investment of existing client commitments during the period was offset by the reduction in debt in one fund and an asset sale. Property client commitments remained at £1.6 billion at 30 September 2009. In addition, our Property team has been appointed by the Australian Government Future Fund to manage its initial UK property investment of £210 million. This inflow will be included in our fourth quarter AUM. We expect an increase in the pace of investment from the end of 2009 and into 2010.
Lower margin products saw net outflows of £0.3 billion during the period. Flows of £0.3 billion into our Fixed Income business, mostly into asset-backed securities funds, were offset by redemptions of £0.3 billion from equity funds, including a long-standing US sub-advisory mandate taken in-house, £0.1 billion from our cash funds and £0.2 billion from NSIM. The Henderson Institutional business has a net pipeline of client commitments of around £0.7 billion made up of fixed income, global equity and cash funds. This pipeline will be partially offset by the outflow of £0.2 billion New Star private client money previously highlighted and expected to occur in the fourth quarter of 2009 and a further £0.2 billion net outflow from NSIM that occurred in October 2009.
We had net outflows of £1.2 billion from Pearl in the period: £0.3 billion from the run-off of Pearl's closed life books and £0.9 billion in respect of previously notified withdrawals. Pearl has a further £1.4 billion of assets which it has given notice on, but has yet to withdraw. We continue to manage these funds on a care and maintenance basis. Given the investment management and other related agreements entered into with Pearl in June 2006, the Pearl fund outflows mentioned above will not have any material impact on Henderson's future revenues.
Investment performance
Overall, Henderson's investment performance in Listed Assets is good, with 81% of Equity and Fixed Income funds achieving or beating their benchmarks over one year (three years: 77%). Property and Private Equity investment performance have been adversely impacted by current market conditions. Property however, has seen an improvement in investment performance in the third quarter of 2009 as UK market conditions improve, although the overall track-record remains impacted by the adverse market movements over the past two years. NSIM's investment performance has been disappointing.
US Wholesale maintained its excellent track record with 98% of assets outperforming over one year (three years: 98%). The Horizon SICAVs continued to deliver strong performance with 74% of assets beating target over one year (three years: 86%). In Henderson UK Wholesale investment performance suffered slightly over one year with 51% of assets beating their benchmarks (three years: 57%). In the Henderson Institutional business, 87% of assets have beaten their benchmarks over one year (three years: 83%). Investment performance of the New Star UK wholesale funds continues to improve with 61% of funds achieving or beating their benchmarks year-to-date although performance over one year remains poor at 24% (three years: 14%).
In light of current investment performance and recent market improvements, we remain confident of our previous guidance for full-year 2009 on performance and transaction fees.
Balance sheet
The Group's balance sheet at 30 September 2009 comprised total net assets of £283.5 million (largely unchanged since 30 June 2009) including unrestricted cash balances of £81.2 million.
Board of Directors
As announced in mid-September, John Roques will retire as a Non-Executive Director of the Group on 31 December 2009 and Robert Jeens will become Chairman of the Audit Committee at that time.
³ Valuation as at 30 June 2009, completed in third quarter of 2009.
……….*……….
Appendix: Number of shares for earnings per share (EPS) calculations
|
FY09(E)¹ |
FY09(E)¹ |
||
|
Basic EPS calculation: |
No. (millions) |
Diluted EPS calculation: |
No. (millions) |
|
Issued share capital |
810.0 |
Shares for Basic EPS calculation |
759.4 |
|
Less: own shares (unconditional awards) |
(45.5) |
Add back: own shares (unconditional awards) |
45.5 |
|
Less: own shares (conditional awards) |
(5.1) |
Add back: dilutive potential of share options |
4.7 |
|
Shares for basic EPS calculation |
759.4 |
Shares for diluted EPS calculation |
809.6 |
¹ This is a full-year weighted average number of shares based on current issued share capital and employee share plans.
Forward-looking statements
This announcement contains forward-looking statements with respect to the financial condition, results and business of Henderson Group. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. Henderson Group's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.
Notes to editors
About Henderson Group plc
Henderson Group plc ('Henderson Group' or 'Group') is the holding company of the investment management group Henderson Global Investors ('Henderson'). Henderson Group's principal place of business is in London and since December 2003 it has been dual-listed on the London Stock Exchange and Australian Securities Exchange ('ASX'). Henderson Group is a constituent of the FTSE 250 and S&P/ASX 200 indices. Since 31 October 2008, the Group has been incorporated in Jersey and tax-resident in the Republic of Ireland.
Established in 1934, Henderson is a leading independent global asset management firm. The company provides its institutional, retail and high net-worth clients with access to skilled investment professionals representing a broad range of asset classes, including equities, fixed income, property and private equity. Henderson is one of Europe's largest investment managers, with £57.7 billion assets under management and employed around 940 people worldwide (as at 30 September 2009).
About CHESS Depositary Interests
In this announcement, the term "shareholders" refers to all holders of Henderson Group plc shares, including those whose holdings are in the form of CHESS Depositary Interests on the Australian Securities Exchange.
CHESS Depositary Interests, or CDIs, are a way of allowing securities of foreign companies to be traded on the Australian Securities Exchange. CDIs afford shareholders all the same direct economic benefits as ordinary shares, like the right to dividends and the right to participate in rights offers.
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Further information
www.henderson.com or
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Investor enquiries
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Mav Wynn, Head of Investor Relations
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+44 (0) 20 7818 5135 or
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+44 (0) 20 7818 5310
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Media enquiries
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Richard Acworth, Head of Corporate Communications
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+44 (0) 20 7818 3010
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United Kingdom: Maitland
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Australia: Cannings
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Brian Cattell/ Rebecca Mitchell
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Luis Garcia
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+44 (0)20 7379 5151
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+61 (0)2 8284 9990
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