Premier Miton reports first-half loss, cuts interim dividend

(Sharecast News) - Premier Miton reported a first-half loss and cut its interim dividend on Thursday after assets under management fell, with outflows concentrated in a small number of underperforming international equity strategies.

The AIM-listed fund manager said assets under management fell to �9.0bn at 31 March from �10.3bn at the end of September.

Net outflows totalled �1.3bn over the six months, compared with �254m a year earlier, while market and investment performance reduced assets by a further �21m.

Outflows were mainly concentrated in international equity funds, where assets fell to �1.4bn from �2.4bn, driven by �879m of net outflows and �104m of negative market and investment performance.

UK equities also saw �266m of net outflows, while absolute return strategies had �191m of outflows.

Premier Miton said the pressure was not systemic across the business, pointing to �274m of net inflows into fixed income and more resilient demand in selected multi-asset and income strategies.

Assets under management remained at about �9.0bn at 29 May.

Revenue fell to �26.9m from �33.1m, while gross profit declined to �25.9m from �32.4m.

The group swung to a pre-tax loss of �0.5m from a �1.1m profit a year earlier, while adjusted profit before tax fell to �3.0m from �5.4m.

Adjusted operating margin narrowed to 11.6% from 16.7%, reflecting lower assets and a changing business mix.

Net management fee margin fell to 53.6 basis points from 57.0 basis points.

Premier Miton said it had maintained a strong balance sheet, with cash of �24.6m at the end of March and no external bank debt.

Total shareholders' equity stood at �107.8m.

The board declared an interim dividend of 1.5p per share, down from 3.0p a year earlier.

It said it expected to declare a further 1.5p final dividend, subject to second-half trading, and intended to move from the next financial year to a policy of distributing 75% of adjusted profit after tax.

Chief executive Mike O'Shea said the company had taken "decisive action" to address weaker performance and reposition the business for more stable outcomes.

"While market conditions have remained challenging and net outflows have continued, this has been concentrated in a small number of strategies, with other parts of the business demonstrating resilience and ongoing client demand," he said.

The company said it was seeing early signs of stabilisation, with improving short-term performance across several strategies, including UK and European equities.

Year-to-date, around 60% of assets were performing above median, with 40% in the first quartile.

Premier Miton said it had strengthened investment oversight and governance, including leadership changes within global equities, and was aligning distribution efforts more closely with areas of stronger performance and client demand.

The group also said it had identified a further �2.5m of annualised administration cost savings, in addition to �5m previously announced.

The latest measures were expected to be implemented by September, with one-off costs of about �0.5m.

Completed efficiency measures included the closure of the Guildford office, the move to a third-party platform for the Premier Portfolio Management Service and the outsourcing of equity trading.

Chair Christopher Williams said the first-half performance was disappointing but that the business had responded proactively through team changes, selective recruitment, cost control and a sharper focus on products with strong performance and client demand.

"The board remains confident in the strategy and in the actions being taken to strengthen the group and position it to deliver improved performance for clients and shareholders over time," he said.

At 1131 BST, shares in Premier Miton Group were down 4% at 36p.

Reporting by Josh White for Sharecast.com.

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