Coronation benefits from strengthening equity markets

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The company’s revenue for the six months ended 31 March 2014 grew to 2.3 million rand from 1.4 million rand in the previous comparative period.

The rise in revenue resulted in an increase in diluted headline earnings per share of 69 per cent to 275.4 cents from 163.4 cents in 2013.

[DATA CML:Coronation] is a South African third-party fund management company with an additional presence in Botswana, Swaziland, Ireland and the United Kingdom.

(READ MORE: Coronation posts 84% increase in revenue in 2013 FY)

Profit from fund management grew by 67 per cent to 1.2 billion rand from 774 million rand in the same period last year.

Profit for the period grew to 966 million rand from 572 million rand for the same period in 2013.

Headlind earnings per share grew 69 per cent to 275.4 cents from 163.4 cents in the same period last year.

 “The business attracted total net inflows of 14.7 billion rand in the half year ended 31 March 2014, including direct flows into international products of 8.9 billion rand,” Coronation explained.

“For the period, total assets under management increased by 11 per cent to 547 billion rand from 492 billion rand in September last year, of which international assets under management represent 105 billion rand from 85 billion rand in September last year.”

The total institutional business recorded net outflows of 2.3 billion rand for the period as a result of the required rebalancing of client portfolios and Coronation’s South Africa equity and multi-asset class products being closed to new investors.

The international pooled and segregated mandates nevertheless attracted net positive inflows of six billion rand.

Coronation’s retail business continued to attract exceptional investor support, recording net flows of 17 billion rand for the period and increasing the company’s share of the long-term retail market to 14.5 per cent from 13.6 per cent in September.

A gross dividend for the interim period ended 31 March 2014 of 275 cents per share was declared.

“The past six months mark yet another exceptional period for the business and for our clients. While equity markets have continued to be strong, the absolute levels of return are not sustainable and we caution investors to re-set their expectations for the years ahead,” Coronation explained.

“Coronation is a cyclical business and we envisage a difficult investment environment with increased market volatility. Going forward our focus remains fixed on creating long-term value for all our stakeholders.”