Coronation posts 84 per cent increase in revenue

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The asset management company, which released results for the 12 months to 30 September 2013, had an 84 per cent increase in revenue from 1.9 billion rand in the previous comparative year to 3.6 billion rand.

The revenue increase resulted in 102 per cent profit to 2 billion rand from fund management. Diluted headline earnings per share also increased 110 per cent from 197.8 cents in 2012 to 416 cents.

“The environment remained very supportive in the period under review, with equity markets around the world delivering high returns,” the group said in a statement.

“However, volatility was high, with emerging markets selling off during the third quarter of the financial year on the US Federal Reserves announcement of possible quantitative easing tapering.”

Assets under management were up 45 per cent to 492 billion rand from 339 billion rand in 2012. International assets under management also increased to 80 billion rand.

“The business is built around two primary client market segments. The institutional business offers local and international mandates to South African and international investors. Our retail offering focuses on a range of domestic and international unit trust funds for local investors,” the group explained.  

[DATA CML:Coronation’s] institution business enjoyed strong support during the financial year, drawing total net inflows of 20.7 billion rand.  13.2 billion rand of this figure constituted direct flows from South African and global clients into the group’s international pooled and segregated mandates.

Its retail business registered 33.3 billion rand in total net inflows for the financial year. The business also attracted a significant portion of the flows into the South African collective investment schemes industry. As a result, Coronation now has a 13.6 per cent market share from 11.2 per cent in 2012.

A final gross dividend of 253 cents per share has been declared for the year ended 30 September 2013.

“We continue to caution investors that the absolute levels of returns delivered by capital markets are unsustainable and that we expect lower returns in the future,” the group explained.

“The years ahead will undoubtedly present a more difficult investment environment and we will remain focused on creating long-term value through the cycle for all stakeholders.”