Intermediate Capital Group, the specialist investment firm and asset manager, has reported a significant drop in half year group pre-tax profit (PTP) as a result of the difficult economic climate, but still announced a 0.3p increase in the dividend payment to 6.3p.
Although fund management company PTP edged £0.1m higher to £17.2m in the six months ended September 30th, investment company PTP declined from £91.7m to £22.4m, giving overall PTP of £39.6m (2011: £108.8m). Earnings per share more than halved from 21.6p to 10.3p.
In addition to the economy, the group also attributed the reduction to PTP to a slow exit market, which it said has resulted in a low level of realised capital gains. It also took material provisions for two large assets which are undergoing restructurings.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The investment portfolio was also lower, decreasing from £2,414m to £2,344m year-on-year, while third party assets under management fell from €9,165m to €9,127m over the same period.
However, assets under management rose 6.0% to €12.1bn in the first half of the year, up from €11.4bn at March 31st, with continued momentum into the second half. This includes €9.1bn in third party funds.
Chief Executive Officer Christophe Evain, said: "The difficult economic climate has negatively impacted our results for the period, leading to provisions for two large assets and a low level of realisations. The remainder of the portfolio is broadly resilient but the economic environment remains volatile.
"We are announcing some pleasing progress for our Fund Management Company. The fundraising for ICG Europe Fund V, which is already 15% ahead of our €2bn target at €2.3bn, will result in this fund being our largest ever mezzanine fund and the largest fund of its type in Europe. This is a considerable achievement in a very difficult fund raising environment and supports our ambition to grow our fund management franchise.
"Institutional investors are increasing allocations to credit as they recognise the contribution this asset class can make to the overall yield of their portfolio. We are confident that this trend will continue. The success of ICG Europe Fund V, with a highly diversified global investor base, is an endorsement of our strong position in the credit markets and evidence that our recently enhanced distribution capabilities are already delivering benefits."
The group said that in the first six months of the financial year it invested £469m on behalf of the mezzanine funds and ICG, which is more than the £406m invested in the whole year to March 31st 2012.
The share price fell 0.27% to 292.50p by 09:00.
NR
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
