Premier Miton profits fall 15% after outflows

Premier Miton profits fall 15% after outflows

Asset manager Premier Miton’s pre-tax profits shrunk by 15 per cent in the year to September 2022, following over £1bn of outflows.

In annual results published today (December 2), the firm said its profit before tax fell £2.6mn, from £17.5mn to £14.9mn.

In October, the asset manager confirmed net outflows had continued to grow, totalling £1.1bn for the year.

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Chief executive Mike O'Shea said he was “very much of the view that when confidence returns, investors will increasingly seek genuinely active strategies as they look to deliver added value for their clients above benchmark returns”.

The firm offers investors actively managed equity, multi-asset and fixed income funds, as well as investment trusts. 

With bond yields rising rapidly this year, equity markets have been forced to retrench.

The asset manager’s equity funds have suffered the most, experiencing net outflows of nearly £1bn over the year, while fixed income and multi-asset funds have brought in a total of £261mn in net flows over the same period.

O’Shea said the impact of this “major shift” in market conditions will “be felt for several years to come”.

But since posting its last set of outflows, O’Shea also said it has been encouraging to see a recovery in assets under management and to have seen a return to net positive flows.

In the two months following September, assets under management have climbed from £10.6bn to £11.3bn. 

"I should highlight that with fixed income markets repricing and yields rising, investors are now beginning to look afresh at this sector," said O'Shea.

"This gives us encouragement for the growth of our fixed income funds over the coming year and beyond."

In September 2021, assets under management had sat at £13.9bn marking a fall of 24 per cent in the 12 months following.

Premier Miton’s board said it has decided on a different annual dividend this year of 10p per share. It represents a 72 per cent pay-out ratio of adjusted profit after tax rather than the usual 61 per cent.

Chair Robert Colthorpe said shareholders will understand how important it is that the business retains sufficient balance sheet strength so it can fully take advantage of the recovery when it comes.

“We see this as a pragmatic deviation from our stated dividend policy which we are otherwise not changing,” Colthorpe added.