Ashmore Group profits slide on £49.9m seed capital investment loss

Ashmore Group shares fell 0.4% to 193.3p in early morning trading on Friday, after the company announced net outflows of $13.5 billion and negative investment performance of $16.6 billion in FY 2022.

The emerging markets investment manager attributed its results to widespread risk aversion linked to the Ukraine war, inflation and higher rates across international territories.

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The Ashmore Group said market weakness in HY2 resulted in a £49.9 million unrealised mark-to-market loss on seed capital investments.

The firm noted a consequent 58% statutory pre-tax profit decrease to £118.4 million.

Meanwhile, the Ashmore Group reported a 13% adjusted net revenue decline to £257.2 million, with net management fees of £243.5 million against £270.9 million and performance fees of £4.5 million from £11.9 million.

The group confirmed a 7% reduction in adjusted operating costs year-on-year, driving a £164.3 million adjusted EBITDA against £195.7 million the year before, with an EBITDA margin of 64% from 66%.

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The firm also highlighted an operating cash flow of £184.9 million from £213.1 million the last year.

The Ashmore Group mentioned an adjusted diluted EPS of 18.7p against 23.3p in the previous year.

“While the global macro environment still presents some near-term uncertainty, the situation in Emerging Markets is improving and the breadth of investment opportunity helps to mitigate the risks,” said Ashmore Group CEO Mark Coombs.

“Ashmore’s long-term investment approach has been proven across many different market cycles and facilitates access to the exceptionally attractive valuations currently available across Emerging Markets. Risk appetite will improve as some of the recent macro headwinds abate, supporting a recovery in Emerging Markets asset prices and higher investor allocations.”

“Ashmore’s business model, with significant cost flexibility and a well-capitalised and liquid balance sheet, responds to market cycles and generates meaningful cash flow, as seen again in this period. Together with Ashmore’s consistent focus on its growth strategy, this underpins the delivery of long-term value for Ashmore’s clients, shareholders and employees.”

The Ashmore Group recommended a final dividend of 12.1p per share for FY 2022.

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