Premier Miton takes 60% profit hit as net outflows climb to £1.1bn

The firm ended the year to 30 September with profits before tax down 60.4%, falling from £14.9m during the same period last year to £5.9m.

Assets under management fell by 7.5% to £9.8bn, as the firm suffered net outflows of £1.1bn for the year. The average AUM for the year fell by 14% to £10.8bn, down from £12.6bn last year. 

Demand for equity funds fell 37% over the year, although the redemptions from these funds were only down 9% year-on-year. Meanwhile, net sales into fixed income and ‘diversified’ multi-asset funds were up 88% and 19% year-on-year, respectively.

Premier Miton suffers outflows of £449m in Q2

Net revenue fell 18% to £66.9m, as net management fees decreased due to lower average AUM and net management fee margin, which fell from 65.6bps last year to 61.7bps during the period.

CEO Mike O’Shea said the general market backdrop for asset management businesses in the UK has “remained challenging” during the period, arguing that soaring interest rates and geopolitical uncertainty has meant investors have taken a “more cautious approach”.

“Despite this difficult backdrop, we remain a financially robust business and have a diversified range of products delivering excellent outcomes for our clients over the medium- to long-term,” he said. 

“We are also well placed to take advantage of inorganic opportunities as they arise and our recently announced acquisition of Tellworth is a good example of this.”

At the start of November, the firm struck a deal to acquire £559m UK equity boutique Tellworth Investments, an acquisition it said was in line with its “inorganic strategy” of buying complementary asset management platforms with industry expertise and product diversification.

Premier Miton to acquire Tellworth Investments

“Our business has the operational infrastructure to manage a multiple of the assets it currently looks after and we have built the necessary distribution and marketing platform to capitalise on this opportunity,” O’Shea added. 

“We will continue to assess opportunities that can add talented investment teams, or which allow us to access new markets or product capabilities.”

The board proposed a final dividend payment of 3p per share, resulting in a total payout of 6p per share for 2023, marking a decrease from the 10p per share paid out in the previous year.

According to data form Morningstar Direct, Premier Miton shares are down 4.8% this morning. Year-to-date, shares have dropped over 30%.