Woodford Investment Management  

Woodford bags £9m dividend in year before collapse

Woodford bags £9m dividend in year before collapse
 Neil Woodford

Fund manager Neil Woodford earned nearly £9m in the 12 months to the end of March 2019, despite his company’s profits dwindling as his funds underperformed.

Accounts for Woodford Investment Management, published by Companies House yesterday (January 6), showed a dividend of £13.8m was paid out to Woodford Capital, the parent company.

This company is 65 per cent owned by Mr Woodford and 35 per cent owned by Craig Newman, the company’s chief executive, meaning Mr Woodford is entitled to £8.9m of the dividend.

Woodford Capital is an unlimited company, which means it does not have to file accounts, though it is registered in the UK and pays corporation tax. No information is disclosed as to the directors' renumeration.

The £13.8m paid to Mr Woodford and Mr Newman is less than half of what the pair received for the year to March 2018, when £36.5m was paid to Woodford Capital.

This means Mr Woodford was entitled to more than £30m in dividends for the two years leading up to Woodford Investment Management's collapse.

A Woodford spokesman said: "The accounts relate to the financial year before the equity income fund was suspended. We can confirm that the partners did not take any profits or income during the fund’s suspension nor was any management fee earned from managing Woodford Patient Capital trust."

The accounts also showed Woodford Investment Management reported a profit of £16.2m for the year to the end of March 2019 — less than half of the £33.7m it made the year before.

Its revenue dropped from £78m to £52.6m while its operating profit also fell by 56 per cent to £18.3m.

During this time, both the Woodford Equity Income fund and the Woodford Income Focus fund underperformed their peers, losing 3.15 per cent and 4.34 per cent respectively over the year to March 2019.

By comparison, the IA UK Equity Income sector gained 5 per cent during the same time period.

The collapse of Woodford Investment Management began in June 2019, when Mr Woodford was forced to suspend his flagship £3bn Equity Income fund following a period of sustained outflows, which were running at a net £9m every working day in May.

When the fund struggled to meet requested redemptions, it was suspended. In October it was announced the fund would be wound down and Mr Woodford fired as manager by the authorised corporate director, Link Fund Solutions.

He then walked away from his remaining two investment vehicles - the Income Focus fund and the Patient Capital trust - before confirming he would close Woodford Investment Management.

Commenting on the fund’s suspension in ‘post balance sheet events’ in the accounts, the board reported that “under performance...combined with a period of sustained and negative press coverage” had resulted in the fund being gated.

imogen.tew@ft.com

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