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Ashmore Group appoints UBS and Goldman Sachs to complete secondary placing, preliminary results disappoint


Shares in Ashmore Group (LSE: ASHM) were out of favour this morning after the FTSE 250 emerging markets investment manager released preliminary results for the year ended 30 June 2009.   Ashmore Group described the results as ‘broadly satisfactory’.

For the year Ashmore reported a reduced profit of £159.8, a decrease of 19% from 2008, similarly net revenue fell 15% to 203.5m. Despite the reduced group profit Ashmore were able to increase their client fees, with an increase of 1% for their management fee and an additional £7.8m in performance fees recouped during the year. However the Group’s Forex hedging cost Ashmore £42.4m for the year. Operating margins fell slightly to 74.5%.

In what has been a turbulent year for capital markets, Ashmore’s ‘Assets under Management’ (AuM) reduced to US$12.6bn, 34% less than the previous year, however Ashmore CEO, Mark Coombs stated that ‘July and August have seen net inflows, following the trend established in May and June.’

From a shareholders perspective, Earnings Per Share (EPS) reduced to 17.1p, and Ashmore will pay a final dividend of 8.34p, taking the full year dividend to 12p per share.

According to Ashmore the results reflect a broadly satisfactory year in the context of an ‘extreme reduction in the levels of leverage deployed across the world and a significant reduction of liquidity and increased volatility throughout world markets. ‘

In his accompanying statement Ashmore CEO, Mark Coombs highlighted the strengthening role emerging markets have played following the devaluation of mature capital markets;

“The reshaping of the emerging markets role within the global order has received a significant boost in the last year.  As emerging markets make up a greater proportion of the world's markets, the long term trend of an increasing allocation from investors towards them continues to be very positive for Ashmore”

Following today’s preliminary results Ashmore have also announced a secondary placing of up to 15.6 million ordinary shares, the placing will reduce the equity held by Ashmore employees and related interests. Ashmore have appointed Goldman Sachs and UBS to act as joint global co-ordinators and bookrunners for the placing.

The Placing, will be undertaken by way of an accelerated bookbuild process to institutional investors. The total equity will represent up to 2.2% of the outstanding issued share capital. The sale price will be determined and announced after closing of the Placing.

Ashmore shares fell more than 5% following today’s announcements.

Quick facts: Ashmore Group

Price: 454.2961 GBX

Market: LSE
Market Cap: £32.43 m

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