Intermediate Capital shares rally with AUM rise

Intermediate Capital shares rally with AUM rise

British specialist asset management firm Intermediate Capital Group plc (LON:ICP) saw its share price rally during Wednesday trading following the company’s announcement that its assets under management had risen by 29%.

International Capital performance

Thankful not to have as difficult an outlook as their asset management counterparts Babcock (LON:BAB), ICG booked an impressive growth in assets under management, which the company attributes to an influx of net fund flows amid strong demand across a broad range of its investment strategies. During the year ending 31 March, AUM grew 29% to €37.1 billion. Inflows were €10 billion and fee earning assets under management from third parties were up 41% at €29.6 billion.

Pre-tax profits spiked 65% on-year to £278.3 million for the full year,and fund management company profits jumped 51% to £143.8 million. Fund management company earnings were up to 49p from 44.9p a share the year before, though this was offset by a drastic fall in Investment company earnings from 43.9p to 14.4p on-year. Overall, earnings per share were down to 63.4p, from 88.8p a year earlier.

Intermediate Capital comments

“This has been an excellent year for ICG. Our disciplined investment processes and consistent investment performance have generated strong demand across a broad range of our investment strategies. Our local teams continue to originate attractive investment opportunities, while locking in returns by realising existing assets where appropriate,” said Benoit Durteste, CEO.

“While our most successful strategies continue to attract higher asset flows, we are putting in place the foundations for future growth, incubating new strategies and building out our pool of talent, and remaining alert for the opportunities any market dislocation may present.”

Portfolio considerations

The company’s final dividend climbed 67% to 35p a share, which lead total ordinary dividends for the full year up 50% to 45p per share.

Following their investor update, the company’s share price rallied 93p or 7.77% during trading on Wednesday, with shares trading at 1,290p as of 22/05/19 14:58 GMT. Shore Capital analysts have reiterated their ‘Hold’ stance on Intermediate Capital stock, while Numis (LON:NUM) reiterated their ‘Buy’ stance.