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Industry Updates

Man results show effects of another tough and challenging year

Thursday, February 28, 2013

Emmanuel Roman
Opalesque Industry Update - Man Group has posted its results for the financial year ended 31st December 2012.

Key points include:

  • Funds under management (FUM) at 31 December 2012 of $57.0 billion (31 December 2011: $58.4 billion)
  • Sales of $12.8 billion, redemptions of $20.1 billion, FRM acquisition $8.3 billion, investment movement of $1.3 billion, FX translation effects of $(0.3) billion and other movements, principally guaranteed product de-gears, of $(3.4) billion
  • Adjusted profit before tax (PBT) of $278 million, comprising adjusted net management fee PBT of $223 million and net performance fee PBT of $55 million
  • Further impairment of GLG goodwill ($746 million) in addition to the impairment reported at 30 June 2012 of $233 million (GLG $91 million and Man Multi-Manager $142 million)
  • Statutory loss before tax for the year ended 31 December 2012 of $745 million, reflecting impairment of goodwill and other adjusting items
  • $95 million of operating cost savings announced in January 2012 have been delivered
  • Further annual cost savings of $100 million announced in July 2012 are on track for delivery by the end of 2013
  • Surplus regulatory capital of $795 million at 31 December 2012
  • Proposed final dividend of 12.5 cents per share; total dividend for the year expected to be 22 cents.

Manny Roman, Chief Executive Officer of Man, said: “2012 was another tough year for Man. Trading conditions were highly challenging as markets continued to be dominated by political uncertainties in Europe and the US and macroeconomic risks. Investor appetite remained muted and as expected there was a further decline in Man’s product margin mix and revenues. Management’s priority last year was to maintain the focus on delivering investment performance for our investors, while reducing our cost base to a level which reflects the economics of a reduced and different mix of asset flows. On both counts we made good progress.

As of mid-February 2013, most of our strategies were off to a good start and there is no doubt investor sentiment has improved somewhat. The number of requests for proposals and the pipeline of new mandates have increased to a degree. However, given the lead time required by institutional investors to invest, gross sales are likely to remain muted in the first half and we are yet to see a slow down in the rate of redemptions.

We have introduced changes to senior management to further enhance Man’s focus on investment performance. We will maintain our efforts to make Man lean and efficient. We have identified areas where over the medium term we can build and enhance our investment platform and deliver profitable growth for our shareholders. This gives grounds for cautious optimism for the medium term, but there should be no doubt that business conditions remain very tough. We will continue to focus on delivering performance for our investors; from that, all else flows.”

Press release

bc

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