Man Group dividend promise sends shares up 9%

Man Group shares soared in morning trading in London after the manager announced a more generous dividend policy for shareholders.

The share price gain came despite the group reporting a 40% fall in pre-tax profits for the nine months ended 31 December 2011

The figure of $193m is down from $324m for the 12 months ended March 2011.

Shares in Man Group rose 8.74% this morning to trade at 142.35p.

Net income from performance fees over the reporting period was $37m, down from $169m for the year ended 31 March.

However, the group said two thirds of GLG funds were above or within 5% of performance fee highs as at 24 February 2012.

Funds under management stood at $59.5bn at the end of February, edging up slightly from $58.4bn at the end of December.

Man Group also reported diluted statutory EPS of 7.6 cents and adjusted diluted EPS of 10.7 cents over the nine months of the reporting period.

The firm has changed its dividend policy so it will now pay out 100% of adjusted management fee earnings per share each financial year through an ordinary dividend.

For 2012 the total dividend will be 22 cents per share, with a final dividend of 7 cents per share for the nine months to 31 December 2011.

Man chief executive Peter Clarke said strong returns at GLG and a smaller positive contribution from AHL had increased AUM at the start of the year.

“Investor sentiment has improved compared to the last quarter of 2011 and lower redemptions have driven a significant reduction in the rate of net outflows. But sentiment remains fragile and it is likely to take a longer period of stability in markets and continued performance before this translates into increased sales and net inflows,” he said.

“We have taken action to reduce costs while continuing to focus on meeting the needs of our investors, as we manage the growing demand for open-ended products as a proportion of total funds under management.”

The firm saw its share price plunge 20% in a single day after it reported in September last year, posting significant outflows from its funds.

The shares have continued to drop despite the market rally, falling 52% over the last 12 months.

 

This article was first published on Investment Week

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