Pendal Group’s Shares Tumble Despite The Increase Of $1.6 Billion In September Quarter’s FUM

  • Oct 11, 2018 AEDT
  • Team Kalkine
Pendal Group’s Shares Tumble Despite The Increase Of $1.6 Billion In September Quarter’s FUM

On 11 October 2018, Pendal Group Ltd (ASX: PDL) made an announcement regarding Funds Under Management(FUM) for the Quarter Ended 30 September 2018. In the September quarter, the FUM increased by $1.6 billion over the last quarter. Despite the release of this news, the share price of the company decreased by 3.129 percent as on 11 October 2018.

During the September Quarter, the company witnessed significant net inflows in the institutional channel including the inflow of around $1.5 billion of Australian equities and inflow of around $0.7 billion of cash strategies. The outflows in the FUM were mainly related to previously announced BTFG MySuper portfolio of $2.2 billion and the run-off in the legacy book. The company’s wholly-owned subsidiary J O Hambro Capital Management (JOHCM) witnessed net outflow of $0.1 billion during the September quarter mainly due to an outflow of $0.2 billion in segregated mandate redemptions in global strategy and a net outflow of $0.3 billion in European OEIC funds. With strong inflows into global and emerging market strategies, the US Pool funds took in $0.4 billion. The annualized fee income decreased by $0.8 million due to the net flows during the September quarter. 

In the first half of FY 2018, the Average FUM of increased by 14 percent to $98.6 billion over the prior corresponding period. The increase in FUM was mainly due to positive market and investment performance of $2.2 billion and favorable currency movements of $3.1 billion which was offset by net outflows of $2.1 billion. The Cash NPAT of the company increased by 30 percent to $114.5 million over the prior corresponding period. The base management fees of the company increased by 18 percent to $247.9 million over the prior corresponding period. The performance fees of the company increased by 70 percent to $47.6 million over the prior corresponding period. Due to an increase in the performance fees and the base management fees, the total fees revenue increased by 21.8 percent to $296.4 million. Driven by the higher variable employee costs linked to increased fee revenue and ongoing investment in group operations supporting recent and future growth of the business, the total expenses increased by 11 percent to $157.7 million. During the half year, the Company issued 1,494,915 ordinary shares to satisfy an exercise of equity rights by fund managers under the FLE scheme. The shares were issued on 23 November 2017 and are subject to vesting conditions of up to 5 years. The interim dividend of the company was up by 16 percent to 22 cents per share. The cash EPS of the company increased by 28 percent to $36.2 cps.

Recently, the company announced the appointment Mr. Bindesh Savjani for the role of global chief risk Officer. The company continues to focus on growth and diversification via attracting and retaining investment talent that creates a portfolio of complementary strategies, ongoing development of new products and extension strategies, investing to build meaningful US business. PDL’s share traded at $8.050 with a market capitalization of circa $2.64 billion as on 11 October 2018 (AEST 4:00 PM).

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