Coronation delivers excellent results
14 May 2013 - Coronation Insights
Underpinned by a substantial increase in assets under management and very strong investment performance.
- Assets under management at R409 billion
- Diluted headline earnings per share of 163.4 cents
- Interim dividend per share of 163 cents
Leading independent, JSE-listed asset manager Coronation Fund Managers (Coronation) today announced an excellent set of results for the six months to 31 March 2013.
Revenue increased by 62% to R1 475 million, from R912 million in the prior half year, on the back of excellent investment performance and a substantially increased asset base. For the period under review, assets under management increased by 21% to R409 billion (September 2012: R339 billion), driven by total net inflows of R21.9 billion and rising global markets.
This resulted in an 88% increase in diluted headline earnings per share to 163.4 cents (March 2012: 86.7 cents). If the effect of Secondary Tax on Companies in the comparative period is removed, as a result of the introduction of Dividends Tax (DT), the increase in diluted headline earnings per share is 72%.
Anton Pillay, CEO of Coronation commented: “Exceptional investment performance and a substantial increase in assets under management during the period had a highly positive impact on our revenue. Although our short-term prospects appear robust, we would like to remind investors that, as a long-term manager, our business is cyclical. Our revenues are highly geared to market returns and the outperformance we deliver in the funds we manage.
Looking ahead, we expect that markets will deliver lower returns compared to the recent past. In this more difficult market environment, we will remain unwavering in our pursuit of long-term value through the cycle and in serving our clients.”
Coronation endeavours to distribute at least 75% of after-tax cash profit. Accounting for projected cash requirements, an interim gross dividend of 163 cents per share has been declared, resulting in a net dividend of 138.55 cents per share for shareholders who are subject to dividends tax.
Coronation Fund Managers
Louise Pelser 021 680 2216
076 282 3995
Johannes van Niekerk 082 921 9110
Led by equity markets in the US and Japan, the MSCI World Index returned 10.7% (in US dollar terms) for the six months to end March 2013. Following a slightly negative return in the second half of the six-month period, the MSCI Emerging Markets Index produced 4% (in US dollar terms). The FTSE/JSE All Share Index also recorded a weaker second quarter, yet continued to reach new highs, producing a return of 13.1% (in rand terms) for the period. Notwithstanding the favourable yield-seeking global environment, the rand depreciated by 10.1% against the US dollar over the period to close at R9.23.
Institutional fund performance
The institutional business attracted net inflows of R3.6 billion over the period. Over 3, 5 and 10 years both Coronation’s domestic and global balanced portfolios ranked in the 1st quartile of the respective Alexander Forbes SA Large Manager Watch™ and Global Large Manager Watch™ surveys as at 31 March 2013.
The Balanced and Absolute Return product ranges closed to new investors on 31 December 2012.
Retail fund performance
The retail business attracted net inflows of R15.5 billion over the period. Coronation is the 2nd largest manager of long-term unit trust funds in South Africa and was named Raging Bull Domestic Management Company of the Year and Morningstar Best Large Fund House (for the third consecutive year).
First quartile returns were recorded across the entire domestic flagship fund range over 3 years, 5 years and since launch to 31 March 2013 in their respective Morningstar categories. Highlights include:
- Coronation Top 20, which has outperformed its benchmark by a strong 6.4% per annum (net of fees) since inception in October 2000;
- Coronation Balanced Plus, the no.1 balanced fund in South Africa since launch in April 1996, which has outperformed its average competitor by 2.7% per annum (net of fees) over this period;
- Coronation Capital Plus, which has delivered returns 8.5% ahead of inflation per annum (net of fees) since inception in July 2001;
- Coronation Balanced Defensive, South Africa’s no.1 conservative fund for the five-year period to end March 2013, which has outperformed inflation by 4.5% per annum (net of fees); and
- Coronation Strategic Income, which has outperformed cash by 3% per annum (net of fees) since launch in July 2001.
International fund performance .
International assets under management increased by 24% to $5.3 billion.
Since inception in October 2008, the Coronation Africa Frontiers Fund has outperformed its benchmark by 11.2% per annum (gross of fees), while the Coronation Global Emerging Markets Fund has produced an outperformance of 8.3% per annum (gross of fees) since launch in July 2008.
The international funds continue to gain traction across the entire fund range. The global balanced fund, Coronation Global Managed achieved a commendable 2.87% outperformance (gross of fees) in its three-year track record to date.
Coronation’s broad-based black economic empowerment partner, the Imvula Trust (Imvula), acquired 10% of Coronation in exchange for its shareholding in the unlisted Coronation Investment Management (Pty) Limited. For this purpose, the JSE granted the listing of 34 979 910 Coronation ordinary shares, with effect from 28 February 2013. Imvula was created in April 2005 to achieve a direct ownership for all black staff in Coronation and its subsidiaries.