GAM Holding AG H1 2017 underlying pre-tax profit CHF 75.4 million
(Thomson Reuters ONE) -
GAM Holding AG /
GAM Holding AG H1 2017 underlying pre-tax profit CHF 75.4 million
. Processed and transmitted by Nasdaq Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
* Underlying profit before taxes rose 37% from H1 2016 to CHF 75.4 million;
diluted underlying EPS up 37% to CHF 0.37 (CHF 0.27 in H1 2016)
* IFRS net profit up 27% to CHF 67.7 million; diluted IFRS EPS of CHF 0.43
(CHF 0.34 in H1 2016)
* Net fee and commission income up 11% to CHF 257.7 million
* Group assets under management up 9% to CHF 131.3 billion from CHF 120.7
billion at 31 December 2016
* Investment management:
* Net inflows of CHF 1.9 billion, with specialist fixed income strategies
driving inflows
* Assets under management up 6% to CHF 72.2 billion from CHF 68.2 billion
at 31 December 2016 as a result of net inflows and a net positive impact
from investment performance and foreign exchange movements
* Private labelling:
* Net inflows of CHF 4.5 billion
* Assets under management up 13% to CHF 59.1 billion from CHF 52.5 billion
at 31 December 2016, driven by net inflows and a net positive impact
from market and foreign exchange movements
Group CEO Alexander S. Friedman said: "Our financial results are beginning to
reflect all our work to implement a turnaround at GAM. The steps we have taken
over the past two years are showing tangible results, and the outlook gives us
confidence in the future performance of the business.
Our net inflows were strong in the first half of this year, the investment
performance of the majority of our assets under management was excellent, a
number of our key investment strategies delivered good performance fees, and our
profitability improved substantially compared with the first half of 2016. We
are well underway in positioning GAM for long-term growth, and our focus on
disciplined execution of our strategy and operating efficiency is unrelenting."
Group results H1 2017
The underlying pre-tax profit rose 37% to CHF 75.4 million compared with the
first half of 2016 as costs continued to be managed tightly and net fee and
commission income increased.
The underlying effective tax rate decreased to 22.1% from 23.3%, mainly
reflecting the geographical split of earnings. Diluted underlying earnings per
share rose 37% to CHF 0.37 from CHF 0.27 as a result of a 39% increase in the
underlying net profit.
The IFRS net profit rose 27% to CHF 67.7 million. The IFRS figure includes two
items that are not reflected in the underlying results: non-recurring items that
resulted in a net loss of CHF 7.3 million and acquisition-related items that
resulted in a net gain of CHF 16.3 million. The former include the impairment of
investment management and client contracts, reorganisation charges, and deal and
integration costs related to the acquisitions completed in the second half of
2016. Acquisition-related items include a reduction in the estimate of the
deferred consideration liability for the acquisitions of Arkos (now GAM Lugano),
THS and Cantab, partly offset by the amortisation of investment management and
client contracts from businesses acquired and finance charges on the deferred
consideration liabilities.
Net fee and commission income increased 11% to CHF 257.7 million. Net management
fees and commissions increased 3% to CHF 238.4 million, driven by higher average
assets under management, while the management fee margin in investment
management was flat compared with the first half of 2016 and slightly decreased
in private labelling. Performance fees rose to CHF 19.3 million from CHF 1.2
million in the first half of 2016, with the unconstrained/absolute return bond
strategy and other fixed-income strategies contributing the majority of these
fees.
Personnel expenses of CHF 125.7 million were largely flat compared with the
first half of 2016. Fixed personnel costs were 6% lower as a result of a
reduction in staff levels from 1,024 at 30 June 2016 to 937 full-time
equivalents at 30 June 2017 (including additional headcount from the
acquisitions of THS and Cantab). Variable compensation rose 11% compared with
the first half of 2016, mainly due to higher performance fee-related bonuses.
The compensation ratio decreased to 48.8% from 53.7%, reflecting the increase in
net fee and commission income with personnel expenses remaining flat.
General expenses increased 5% to CHF 53.2 million compared with the first half
of 2016. Administration expenses, reflecting fees paid to State Street for the
outsourced back and middle office services, increased from CHF 1.7 million to
CHF 4.1 million. These fees were recognised for the first time in March 2016,
while in 2017 they are included for the entire period.
Investment management assets and flows
Strong performance of GAM's investment strategies and strengthened sales
capabilities translated into improved net inflows of CHF 1.9 billion, which
represent an annualised growth rate of 5.6% on assets under management as at 31
December 2016. Positive investment performance was only partly offset by the
negative impact from foreign exchange movements, further boosting assets under
management by a net CHF 2.1 billion. As a result, investment management assets
rose to CHF 72.2 billion at the end of June 2017 from CHF 68.2 billion at the
end of 2016.
Assets under management movements (CHF bn)
Capability Opening AuM Net flows Market/FX Closing AuM
1 Jan 2017 30 Jun 2017
----------------------------------------------------------------------
Absolute return 16.3 (0.6) 0.4 16.1
----------------------------------------------------------------------
Fixed income 20.8 6.0 0.6 27.4
----------------------------------------------------------------------
Equity 12.5 (2.2) 0.7 11.0
----------------------------------------------------------------------
Systematic 3.8 (0.1) - 3.7
----------------------------------------------------------------------
Multi asset 9.6 (0.9) 0.4 9.1
----------------------------------------------------------------------
Alternatives 5.2 (0.3) - 4.9
----------------------------------------------------------------------
Total 68.2 1.9 2.1 72.2
----------------------------------------------------------------------
Net flows by capability
The unconstrained/absolute return bond strategy experienced good inflows in the
period, and the GAM Star (Lux) - Merger Arbitrage fund, which celebrated its
one-year anniversary in July 2017, continued to attract investor demand. The GAM
Absolute Return Europe Equity fund, which takes long and short positions in
equities and equity-related securities of European companies, and the GAM Star
Global Rates fund saw redemptions following a period of weaker performance in
2016. Overall, investors withdrew net CHF 0.6 billion from absolute return
strategies.
In fixed income, net inflows totalled CHF 6.0 billion. The GAM Star Credit
Opportunities strategy, which predominantly invests in investment grade debt or
high quality issuers, the GAM Local Emerging Bond fund, which invests in debt of
emerging countries denominated or pegged to the respective local currency, as
well as the GAM Star MBS Total Return fund all attracted strong inflows.
In equity, net outflows of CHF 2.2 billion reflected redemptions from global
equity mandates and a number of regional strategies, while the GAM Star
Continental European Equity fund continued to attract solid net inflows.
In systematic strategies, net inflows into the GAM Systematic Alternative Risk
Premia strategy were offset by some clients rebalancing away from systematic
products, resulting in net outflows of CHF 0.1 billion.
Multi asset strategies experienced net outflows of CHF 0.9 billion for the
period, reflecting redemptions in private client advisory stemming from previous
affiliations with UBS and Julius Baer as well as some institutional mandates.
Net outflows of CHF 0.3 billion in alternatives largely reflected redemptions in
the fund of hedge funds business, while commodity strategies recorded some
modest inflows.
Net flows by client segment
The Group recorded strong inflows through financial intermediaries, with clients
adding net CHF 2.3 billion in the first half of 2017. Institutional clients
added net CHF 0.3 billion in the period, while net outflows from private clients
of CHF 0.7 billion largely reflect redemptions as explained in the multi asset
section above.
Investment performance
Over the five-year period to 30 June 2017, 72% of assets under management in
funds outperformed their respective benchmark, compared with 68% that
outperformed over five years to 31 December 2016. Over the three-year period to
30 June 2017, 71% of assets under management in funds outperformed their
respective benchmark, up from 60% that outperformed over three years to 31
December 2016.
Private labelling assets and flows
Assets under management movements (CHF bn)
Fund domicile Opening AuM Net flows Market/FX Closing AuM
1 Jan 2017 30 Jun 2017
---------------------------------------------------------------------
Switzerland 31.7 0.2 1.2 33.1
---------------------------------------------------------------------
Rest of Europe 20.8 4.3 0.9 26.0
---------------------------------------------------------------------
Total 52.5 4.5 2.1 59.1
---------------------------------------------------------------------
Assets under management in private labelling, which provides fund solutions for
third parties, rose to CHF 59.1 billion as at 30 June 2017 from CHF 52.5 billion
at the end of 2016. Net inflows amounted to CHF 4.5 billion, while market and
foreign exchange movements added a net CHF 2.1 billion in assets.
Liquidity and tangible equity
The Group's cash and cash equivalents amounted to CHF 281.2 million, down from
CHF 352.7 million at the end of 2016, mainly reflecting the impact of the
dividend payment for the 2016 financial year (CHF 102.2 million) and bonus
payments for 2016. These effects were partly offset by cash flows generated from
operating activities and some seed capital redemptions.
Tangible equity amounted to CHF 108.9 million, compared with CHF 107.4 million
at the end of 2016. The main contributors to this slight increase were the
underlying net profit, the impact from the adjustments to the deferred
consideration liabilities, and the remeasurement of pension liabilities. These
effects were almost fully offset by the dividend payment for the 2016 financial
year and share purchases to cover the Group's obligations under share-based
compensation plans.
Update on strategic initiatives
Investment performance
Investment performance improved in 2017 in many key investment strategies, with
the specialist fixed income and absolute return capabilities doing particularly
well. In equities, GAM hired Matthew Beesley, former head of global equities at
Henderson, to a new role as head of equities to work together with the various
equity teams to optimise performance and risk management and to ensure strong
links with the distribution teams. He joined GAM in March 2017.
The company is introducing a number of changes to build a truly unified equities
business that can deliver significant growth. Each investment team continues to
have investment autonomy to meet its clients' needs. At the same time, the teams
will leverage a common infrastructure and share internally generated research
and insights more efficiently, all to support the generation of superior
investment performance.
Differentiated product offering
The Group continues to develop innovative products to meet clients' needs and
has a strong organic pipeline of product launches for the second half of this
year, spanning equity income, insurance-linked securities and a number of
systematic strategies.
GAM is also further tailoring its product offering regionally. It recently
launched three existing strategies in the form of UK Open Ended Investment
Companies in response to demand from financial intermediaries and advisers, and
an Australian-domiciled fund for GAM Systematic Alternative Risk Premia for the
Australian superannuation sector.
The company continues to simplify its product range to concentrate on the most
promising and scalable strategies. In the first half of 2017, it merged or
closed six funds in addition to 66 funds in the previous two years, with a de
minimis loss of assets under management.
Global distribution
The Group has made good progress in upgrading its distribution capabilities
under the leadership of Tim Rainsford, who joined GAM as group head of sales and
distribution on 1 January 2017. This includes the creation of a new team to
cover global consultants, new sales leadership in the UK and in Asia Pacific,
and a new head of institutional sales for the Middle East. The company expanded
its distribution presence in continental Europe to gain better traction with
clients by opening offices in Vienna and Paris. In addition, it hired a new
global head of marketing, who started in July.
GAM achieved the final step to reduce brand complexity through an agreement with
Julius Baer to terminate its licence to use the Julius Baer trademarks. The
funds formerly bearing the trademarks were successfully rebranded in early July
2017, while ensuring that clients are fully aware that their portfolio managers,
strategies and investment processes remain unchanged.
Operating efficiency
The Group's multi-year change programme to deliver significant operating
efficiencies is progressing well. This extensive programme involves a variety of
projects, including the implementation of single data architecture, a move to
cloud-based IT infrastructure, simplification of systems, processes and
reporting, outsourcing of back and middle office activities, creation of centres
of excellence, premises simplification and legal entity rationalisation.
Cost discipline remains a key priority for the Group as it realises efficiencies
in a controlled and appropriately sequenced manner, while meeting clients' needs
and regulatory obligations. GAM is on track to deliver annual cost savings of
CHF 10 million in 2017 and at least CHF 30 million by 2019 compared with 2016,
excluding the impact from previous acquisitions.
Outlook
Improved investment performance and strengthened distribution capabilities
should help drive future flows. In addition, the current market environment,
with growing dispersion between asset classes and greater importance of
fundamentals, is supportive for active asset managers like GAM.
The Group is committed to increasing diluted underlying earnings per share in
excess of 10% on an annualised basis and achieving an operating margin of
35-40%, both over the five to eight-year business cycle.
Finally, as communicated in April 2017, the Board of Directors is conducting a
comprehensive review of the Group's compensation structures and policies, in
consultation with shareholders. The Board is fully committed to ensuring
alignment of remuneration with the long-term success of the business.
The presentation for media, analysts and investors on the results of GAM Holding
AG for the first half of 2017 will be webcast on 3 August 2017 at 9:00am (CET).
Materials relating to the results (presentation slides, half-year report 2017
and press release) are available at www.gam.com.
Forthcoming events:
19 October 2017 Interim management statement Q3 2017
1 March 2018 Full-year results 2017
19 April 2018 Interim management statement Q1 2018
26 April 2018 Annual General Meeting 2018
For further information please contact:
Media Relations: Investor Relations:
Elena Logutenkova Patrick Zuppiger
T +41 (0) 58 426 63 41 T +41 (0) 58 426 31 36
Visit us at: www.gam.com
Follow us on: Twitter and LinkedIn
About GAM
GAM is one of the world's leading independent, pure-play asset managers. The
company provides active investment solutions and products for institutions,
financial intermediaries and private investors. The core investment business is
complemented by private labelling services, which include management company and
other support services to third-party asset managers. GAM employs over 900
people in 13 countries with investment centres in London, Cambridge, Zurich,
Hong Kong, New York, Milan and Lugano. The investment managers are supported by
an extensive global distribution network.
Headquartered in Zurich, GAM is listed on the SIX Swiss Exchange and is a
component of the Swiss Market Index Mid (SMIM) with the symbol 'GAM'. The Group
has assets under management of CHF 131.3 billion (USD 137.1 billion) as at 30
June 2017.
Disclaimer regarding forward-looking statements
This press release by GAM Holding AG ('the Company') includes forward-looking
statements that reflect the Company's intentions, beliefs or current
expectations and projections about the Company's future results of operations,
financial condition, liquidity, performance, prospects, strategies,
opportunities and the industry in which it operates. Forward-looking statements
involve all matters that are not historical facts. The Company has tried to
identify those forward-looking statements by using words such as 'may', 'will',
'would', 'should', 'expect', 'intend', 'estimate', 'anticipate', 'project',
'believe', 'seek', 'plan', 'predict', 'continue' and similar expressions. Such
statements are made on the basis of assumptions and expectations which, although
the Company believes them to be reasonable at this time, may prove to be
erroneous.
These forward-looking statements are subject to risks, uncertainties,
assumptions and other factors that could cause the Company's actual results of
operations, financial condition, liquidity, performance, prospects or
opportunities, as well as those of the markets it serves or intends to serve, to
differ materially from those expressed in, or suggested by, these forward-
looking statements. Important factors that could cause those differences
include, but are not limited to: changing business or other market conditions,
legislative, fiscal and regulatory developments, general economic conditions,
and the Company's ability to respond to trends in the financial services
industry. Additional factors could cause actual results, performance or
achievements to differ materially. The Company expressly disclaims any
obligation or undertaking to release any update of, or revisions to, any
forward-looking statements in this press release and any change in the Company's
expectations or any change in events, conditions or circumstances on which these
forward-looking statements are based, except as required by applicable law or
regulation.
English Press Release :
http://hugin.info/142256/R/2125176/811031.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: GAM Holding AG via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 03.08.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 555127
Anzahl Zeichen: 21927
contact information:
Town:
Zürich
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 266 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"GAM Holding AG H1 2017 underlying pre-tax profit CHF 75.4 million"
steht unter der journalistisch-redaktionellen Verantwortung von
GAM Holding AG (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
