Man Group PLC (LON:EMG) nudged up its dividend as revenue and profit fell in the first half and assets under management decreased.
The hedge fund manager proposed an interim dividend of 4.9 US cents per share, up from 4.7 cents a year ago, as per its policy of paying out management fees profits, which were up 4% in the period.
This was despite profit before tax precisely halving to US$55mln as revenue declined 24% to US$397mln.
The main shortfall in revenue compared to last year was performance fees, which plummeted 77% to US$32m at a gross level and down 89% at a net level, reflecting the difficult market environment seen in the first half of this year, the company said, and with the AHL Evolution strategy having performed very strongly in the prior year.
Funds under management shrank 8% to $108.3bn, though recovering somewhat after an 11% decline to US$104.2bn in the first quarter.
Chief executive Luke Ellis said: “We switched seamlessly to working from home, continued to support our clients at every step and generated outperformance in extremely volatile markets.
“As anticipated, redemptions increased in Q2, but it is pleasing to see flow momentum normalising as we enter the second half.”
The shares fell 2% to 123p on Thursday morning, down more than 20% since the start of the year and more than 40% below highs from early 2018.
Analysts at Shore Capital noted that the main crystallisation date for performance fees is December 31, with a number of strategies “in good shape”.
At last night’s closing price of 126p, the shares trade on 12.6 times broadly consensus full-year earnings per share of 13.0 cents, with the shares on a prospective dividend yield of 4.7% on a 7.7 cents forecast.
The analysts added: “We remain frustrated that Man Group’s valuation fails to capture what we regard as a superior business model, well-positioned for future industry trends (differentiated, technology-driven product set and fee-structures based on sharing strong performance with clients).”