Shares in investment manager, Pendal Group fell more than 8% yesterday after it revealed a poor full-year result and cut final dividend.
The company, which was formerly a part of the Westpac empire, revealed a 9.3% slide in revenue for the September 30 year to just over $466 million, which saw a near 25% slump in full-year earnings to $116 million.
Pendal will pay a final dividend of 22 cents (just 10% franked), down from 25 cents a share a year.
That made a total for the year of 37 cents, down from 45 cents last year.
Pendal shares fell from the opening bell and ended the session down 8% at $6.34 and wiping out most of Tuesday’s gains ahead of the results release yesterday.
Pendal said profits were affected by the COVID-19 pandemic, ongoing trade wars and geopolitical risk impacting markets, client confidence and outflows flows.
Net tangible assets declined from $1.30 in September last year to $1.23, with funds under management falling 4% cent to $94.8 billion.
Performance fees rose from $5.9 million to $13.4 million with better performance and flows in the second half of 2019-20.
“The global economic and health crisis has accelerated a number of secular trends in the global asset management industry and highlighted the importance of environment, social, and corporate governance (ESG) factors affecting the sustainability of businesses; a need to broaden distribution channels and to reduce costs in the operating model,” chairman James Evans said in Wednesday’s release.
Pendal said that to combat the weak result it will lift spending by around $16 million over 2020-21 for “product development, particularly Impact and ESG, improved data and technology capabilities and increasing our global distribution footprint”.
“We believe this strategy will deliver a more cost-effective model and increase funds under management by around 50 per cent by financial year 2025,” Mr Evans said.
