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Interim Results

OM Asset Management reports fall in earnings but ups divi

04 May 2017 14:26

OM Asset Management, a subsidiary of Old Mutual, has reported that earnings (US GAAP) for the first quarter to 31 March fell to $21.4m, down 30.5% from the same period in 2016.

US GAAP EPS came in at 0.19 per share, down 26.9% from the comparative quarter in 2016.

Other highlights included:

- Economic net income EPS of $0.34 per share, an increase of 25.9% from the comparative quarter in 2016

- ENI of $38.9m, an increase of 21.6% from the comparative quarter in 2016

- AUM of $249.7bn at March 31, 2017, an increase of 3.9% from December 31, 2016 and 14.5% from March 31, 2016

- Net client cash flows ("NCCF") for the quarter of $(2.5)bn yielding an annualized revenue impact of $0.8m

- Increase in quarterly dividend to $0.09 per share (up 12.5%)

"OMAM delivered strong operating performance and financial results during the first quarter," said Peter L. Bain, OMAM's President and Chief Executive Officer.

"Assets under management grew 4% from year-end, driven by solid investment performance in a rising market environment, particularly in areas such as emerging markets, ACWI ex-US and domestic equities. We also produced positive revenue flows of $0.8 million resulting from continued demand for higher fee non-US, emerging markets and alternative products, notwithstanding overall AUM outflows of $(2.5) billion. Our ENI operating margin improved by 269 bps to 36% compared to Q1'16, as ENI revenue growth of 30% outpaced ENI operating expense growth of 18%, including the impact of Landmark. ENI per share of $0.34 was up 26% year-over-year, reflecting our operational strength, contributions from the Landmark acquisition, and the benefits of our share repurchase in Q4'16. We are pleased with Landmark's contribution to both flows and profit.

"Our results reflect the consistent execution of our growth strategy and the increasing benefits generated by its components. Many of the higher-fee, in-demand investment strategies generating inflows were the result of collaborative organic growth initiatives between OMAM and our Affiliates, and certain of these products are now generating interest in markets around the world. The Global Distribution pipeline is strong, with search activity across a range of Affiliate products. We also continue to cultivate relationships with entrepreneurial boutique asset management firms seeking a partnership that enables them to enhance and accelerate their long-term growth and stability."

Mr. Bain concluded, "In addition, Old Mutual plc took a significant step in its managed separation process during the first quarter by entering into an agreement to sell 24.95% of OMAM's shares to HNA Capital US."

At 2:23pm: (LON:OML) Old Mutual Group PLC share price was -3.25p at 190.45p

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