Coronation produces solid half year results
01 May 2012 - Hugo Nelson
- Assets under management of R296 billion
-Diluted headline earnings per share of 86.7 cents
-Interim dividend per share of 95 cents
JSE-listed, independent asset manager Coronation Fund Managers (“Coronation”) today reported interim results for the six months to 31 March 2012.
Revenue increased by 11% to R912 million off the strong revenue base achieved in 2011, resulting in a 6% increase in diluted headline earnings per share to 86.7 cents (March 2011: 81.7 cents).
Strong net inflows of R19.1 billion for the period and robust global equity markets (in the second quarter of the financial year), grew assets under management by 28% to R296 billion (March 2011: R231 billion).
For the six months under review, the MSCI World and Emerging Markets indices returned 20.3% and 19.2% (in US dollar terms) respectively, while the FTSE/JSE All Share Index returned 14.9% (in rand terms).
“All areas of the business benefited from inflows over the period, with the retail business in particular continuing to receive strong support”, chief executive officer Hugo Nelson said. In terms of long-term unit trust funds, Coronation remains the second largest manager in the country.
Nelson added, “The consistent delivery on our promise to clients to add value across different mandates was again recognised at the 2012 Morningstar South Africa Awards where Coronation was named Best Large Fund House for the second consecutive year.”
Coronation continued to build on the long-term track records across its comprehensive range of international funds. Worthy of note is the Coronation Global Emerging Markets [USD] Fund, which received a Raging Bull Award for Best Offshore Global Equity Fund available to South African investors. Since launch in July 2008, this fund has delivered 5.0% per year (net of all fees) ahead of the MSCI Emerging Markets Index.
During the period, Coronation announced the closure of its Balanced and Absolute Return products to new institutional clients from 31 December 2012, following the closure of its South African Equity products to new institutional clients on 31 March 2012. These closures have no impact on retail or existing institutional clients. The institutional SA Fixed Interest, Hedge and International fund ranges remain open to new investments.
“As an independent fund manager, our reputation and very existence depend on our ability to outperform the market. It is therefore important that our business does not grow to a level that impedes our ability to effectively manage client assets”, Nelson commented.
Taking into account projected cash requirements, Coronation declared an interim gross dividend of 95 cents per share for the period.
“We continue to reward shareholders through regular and significant distributions of free cash flow generated. We endeavour to distribute at least 75% of after-tax cash profit”, Nelson commented.
Upon the receipt of the interim dividend, Coronation’s broad-based black economic empowerment partner, the Imvula Trust, is in a position to settle its remaining debt. This will facilitate the conversion of the Imvula investment in Coronation Investment Management (Pty) Ltd to listed Coronation Fund Managers shares.
“We are committed to a rigorous investment philosophy that has withstood the test of time. In an environment where market participants continue to respond to short-term newsflow, we continue to focus on capitalising on any mispriced opportunities that we believe will add long-term value for all our stakeholders. We expect the challenges in global financial markets to persist for the foreseeable future and caution investors of ongoing market volatility. By closing three of our institutional products to new investors, we will be better equipped to continue meeting our client expectations and deliver superior levels of performance. We strongly believe our business is positioned to respond to the ever changing environment”, Nelson concluded.
Coronation Fund Managers 021 680 2000
Hugo Nelson, CEO 021 680 2041
Louise Pelser, Media relations 021 680 2216
076 282 3995
Johannes van Niekerk 082 921 9110
Performance highlights to end March 2012 show:
Our institutional global balanced portfolios ranked 1st over 3 years and 2nd over 5 years in the Alexander Forbes (AF) Global Large Manager Watch Survey.
The domestic balanced portfolios ranked 3rd over 5 years in the AF SA Large Manager Watch Survey.
Within the absolute product range, the global portfolios ranked 1st over 3 and 5 years in the AF Conservative Global Manager Watch Survey. Over 1, 3, 5 and 10 years the Coronation Top 20, Balanced Plus and Capital Plus funds ranked in the 1st quartile of their respective Morningstar categories.
Coronation Top 20, the concentrated equity fund for investors seeking long-term capital growth, has outperformed its benchmark by an impressive 6.8% per annum since launch in October 2000. Likewise, the multi-asset Coronation Balanced Plus Fund has delivered 2.3% ahead of its benchmark per year since launch in April 1996.
Coronation Capital Plus, the flagship absolute return fund, has beaten inflation by 8.3% per annum since launch in July 2001, strongly delivering on its dual objective of producing both income and capital growth.
In lower risk options, Coronation Balanced Defensive celebrated its 5-year track record as one of the country’s top performing conservative funds, while Strategic Income, the flagship fixed interest fund, has outperformed cash by 2.7% per year since launch in July 2001.
Coronation’s longest running international unit trust fund, the Coronation World Equity [ZAR] Fund of Funds, has outperformed the MSCI World Index by 2.1% per annum (net of all fees) since launch almost 15 years ago in August 1997. The institutional Coronation Africa Frontiers Fund, that excludes South Africa in its investment universe, has delivered 7.2% ahead of its benchmark per year (gross of all fees) since launch in October 2008.