10th Jul 2006 07:00
Charlemagne Capital Limited10 July 2006 10 July 2006 Charlemagne Capital Announces Unaudited Revenues and Assets under Management for the Six Months Ended 30 June 2006 Charlemagne Capital Limited ("Charlemagne", or the "Group") sets out below thekey revenue items and Assets under Management ("AuM") for the first half of itscurrent financial year. It is expected that the interim financial results willbe announced on 4 September 2006. Group AuM total US$4.0 billion as at 3 July 2006(i) The table below sets out the Group's AuM as at 3 July 2006 and the movementsexperienced in each product range in the period since 1 January 2006. 1 January 2006 Net Novy Neft Net 3 July Movement subscriptions reorganisation performance 2006 in AuM (US$m) (%) (US$m) (%) (US$m) (%) AuM (US$m) period (US$m) (%)Magna 988 45 4.6% 59 6.0% (22) (2.1%) 1,070 8.3%OCCO 254 130 51.2% - - (10) (3.1%) 374 47.2%Institutional 1,998 172 8.6% 77 3.8% (65) (3.1%) 2,182 9.2%Specialist 844 (69) (8.2%) (537) (63.6%) 134 24.8% 372 (55.9%)Total 4,084 278 6.8% (401) (9.8%) 37 0.9% 3,998 (2.1%) Since 1 January 2006, Group AuM has reduced to US$3,998 million, a decrease ofUS$86 million or 2.1%. This includes the return of US$401 million or 9.8% of theopening AuM, as a result of the planned Novy Neft capital return(ii)as indicatedin the Group's AIM Admission Document. Excluding the Novy Neft capital return,the Group's AuM increased by 7.7%. The volatility in emerging markets during the period has inevitably impactedboth the market value of the Group's products as well as flows into theseproducts. This is evident from the quarterly fund flows. During the firstquarter, the Group saw US$611 million of net subscriptions while in the secondquarter there were US$333 million of net redemptions. In aggregate, therefore,during the first six months of the year, net inflows (excluding the effect ofNovy Neft) were positive at US$278 million. The positive fund attribution to Magna and Institutional as a result of the NovyNeft re-organisation is caused by the unwinding of shareholdings by funds inthese categories in Novy. Unaudited revenue numbers for the six months ended 30 June 2006 During the six month period, net management fees receivable were US$20.9 millioncompared with US$12.0 million for the comparative period in 2005. Crystallisedperformance fees were US$26.8 million compared with US$6.2 million for thecomparative period in 2005. As at 30 June 2006, accrued performance fees which had not crystallised wereUS$0.3 million compared with US$10.6 million as at the same date in 2005.Performance fees accrue throughout the accounting period in the accounts of eachrespective fund. It is the Group's accounting policy only to recognise suchrevenues as they crystallise at the year-end of the relevant fund or, in certaincases, on redemption. Levels of accrued performance fees at any particular timeshould not be seen as necessarily indicative of the eventual crystallisedfigures, especially in periods of above average market volatility. Despite the recent market falls, the Directors believe that the Group's fundsare well positioned to be able to generate performance fees in the second halfof the year should emerging markets' valuations rise. Dividend policy In the absence of unforeseen circumstances, the Group intends to declare anordinary interim dividend as well as a special dividend in respect of the sixmonths to 30 June 2006. As stated at the time of IPO, the Directors intend toadopt a progressive dividend policy that reflects the long-term earnings andcash flow potential of the Group. Further details will be provided in theinterim results announcement on 4 September 2006. The Group will also shortly bewriting to its shareholders in respect of the currency election mechanismsrelating to these dividend payments. During the period since listing on 4 April 2006, the Group has spent US$3.6million repurchasing 0.9% of the company's issued share capital. Buying backshares is one of the mechanisms by which the Group seeks to manage its capitalstructure and return surplus capital to shareholders. The Group will continue tobuy back shares as it deems appropriate. Jayne Sutcliffe, Chief Executive commented: "After a strong first quarter foremerging markets, the second quarter saw a period of considerable retrenchment.However, we remain firmly convinced that emerging markets are fundamentallyundervalued compared with developed markets and offer superior growthopportunities. In the majority of markets in which the Group invests, fundamentals haveremained unchanged during this period and valuations have become more attractiveas a result of the decline. We are confident that with a return of stability,the Group will benefit directly from both a rise in asset valuations and areturn of strong flows into emerging markets funds. Net flows for the past six months have been positive excluding the Novy Neftrestructuring. Revenue figures for the first six months have been slightly abovethe Group's expectations and while volatile markets may continue into the secondhalf, we continue to believe that the business is capable of delivering longterm growth." ENDS (i) Data is reported as at the first business day of the following period inorder to capture all subscription and redemption orders placed during the periodbut not processed until the next dealing date for the funds concerned.(ii) Novy Neft and Novy Neft II ("Novy") are Bermudian companies listed on theBermuda Stock Exchange. Novy Neft was launched in November 2003 and Novy Neft IIin February 2004 with the objective of investing in local Gazprom shares viastructured products. In December 2005, and as highlighted at the time of theCharlemagne IPO, Gazprom received legal permission to allow direct foreigninvestment into local Gazprom shares and, as a result, the two funds have beenrestructured during June 2006. As at 3 July 2006, AuM within Novy has reduced toUS$71 million which may roll off over time. Novy generates an annual managementfee of 1 per cent and no performance fees. Enquiries: Charlemagne Capital Tel. 020 7518 2100Jayne Sutcliffe, Chief ExecutiveDavid Curl, Finance Director & Head ofInvestment Smithfield Consultants Tel. 020 7360 4900John KielyGeorge Hudson This announcement is not for publication or distribution to persons in theUnited States of America, its territories or possessions or to any US person(within the meaning of Regulation S of the US Securities Act of 1933, asamended). Neither this announcement nor any copy of it may be taken ortransmitted into Australia, Canada or Japan or to Canadian persons or to anysecurities analyst or other person in any of those jurisdictions. Any failure tocomply with this restriction may constitute a violation of United States,Australian, Canadian or Japanese securities law. The distribution of thisannouncement in other jurisdictions may be restricted by law and persons intowhose possession this announcement comes should inform themselves about andobserve any such restrictions. This announcement contains certain forward-looking statements with respect tothe financial condition, results of operations and businesses of the CharlemagneCapital Group. These statements and forecasts involve risk and uncertaintybecause they relate to events and depend upon circumstances that will occur inthe future. There are a number of factors that could cause actual results ordevelopments to differ materially from those expressed or implied by theseforward-looking statements and forecasts. Nothing in this announcement should beconstrued as a profit forecast. This statement is aimed at providing estimates regarding revenue and tradingconditions experienced by Charlemagne Capital Limited in the six month periodended June 30 2006. The unaudited data contained in this statement are currentlyprovisional and all such data are subject to change and may differ materiallyfrom the final numbers that will be reported on 4 September 2006. This statementis produced in order to provide greater disclosure to investors and potentialinvestors of currently expected outcomes, and to ensure that they all receiveequal access to the same information at the same time. Notes to Editors: Charlemagne Capital is a specialist emerging markets equity investmentmanagement group. Charlemagne Capital Limited was admitted to the AIM market ofthe London Stock Exchange on 4 April 2006. Charlemagne's product range comprises mutual funds, hedge funds andinstitutional and specialist fund products primarily covering GEMs, EasternEurope, Latin America and Asia. Charlemagne Capital employs a range ofinvestment strategies including: long only, long/short, structured products andprivate equity. Charlemagne Capital's funds aim to exploit the inefficiencies inthe market via a strict bottom up approach and focused stock selection. Through the strong long-term investment performance track record of itsprincipal funds, Charlemagne Capital has established itself as a market leaderin emerging markets investment management. Its performance has been recognisedthrough numerous awards and top rankings for its funds, including the 2005Standard and Poor's 5-year best performing fund award in Austria, the 2006 SwissLipper Leaders 5-year award winner for Emerging Markets Europe and an AAA-ratingby Standard & Poor's for its Magna Eastern European Fund (a sub-fund of MagnaUmbrella Fund Plc). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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