Intermediate Capital Group’s strategy driving fund management profits up 32%

FTSE News FTSE 250

Intermediate Capital Group (LON:ICP) has announced its first half results for the six months ended 30 September 2019.

Highlights

  • AUM up 11% on 31 March 2019 to €41.1bn, with €4.6bn of new money raised across 14 strategies
     
  • Fund Management Company profits up 32% to £85.0m (H1 2019: £64.4m); average fee rates maintained
     
  • Group profit before tax on an IFRS basis up 24% to £153.4m (H1 2019: £124.0m)
     
     
  • Earnings per share of 50.8p (H1 2019: 43.6p); Fund Management Company 28.4p (H1 2019: 21.4p) and Investment Company 22.4p (H1 2019: 22.2p)
     
  • Interim ordinary dividend up 50% to 15.0p per share (H1 2019: 10.0p)
     
  • Positive outlook underpins increase in operating margin target to be in excess of 50%, up from 43% previously

Commenting on the results, Benoit Durteste, CEO, said:

“These strong results demonstrate our ability to attract assets to a broad range of new fund strategies that are adjacent to our existing portfolios. Our diversification has resulted in continued healthy fundraising results and the 32% growth in Fund Management Company profits.

“We are well-positioned to deliver sustainable growth. Unlike traditional asset managers, we do not suffer short term outflows as a consequence of the movement in financial markets; we are maintaining or increasing average fee rates on an underlying fund basis. Our long fund life-cycles are designed to withstand economic cycles. This is underpinned by a disciplined attitude to the deployment of funds and proactive approach to realisations.”

Commenting on the results, Kevin Parry, Intermediate Capital Group Chairman, said:

“Our business model is more robust than at any time in the Company’s history and provides the Board with a strong backdrop against which to increase our Fund Management Company operating margin target to above 50%. The new target reflects the maturing of existing strategies while still providing capacity to invest in new fund strategies that will underpin the continued long-term sustainable growth of the Group.

“Our approach to building sustainable growth, while enhancing our responsible investing approach and maintaining our corporate culture, will be the subject of further discussion at our capital markets update on 30 January 2020.