Maintaining the pace

19 May 2004 Angelo Coppola

Listed fund management company Coronation Fund Managers released its interim results for the six months ended 31 March 2004.

Revenue for the six month period was R188.9 million, up from R164.5 million for the previous five-month period to 30 September 2003.

Assets under management increased by 10% from R53.7 billion at September 2003 to R59.3 billion at 31 March 2004.

As highlighted in the trading update of 1 April 2004, net income attributable to shareholders (R60.5 million) was adversely affected by the 29.6% increase in the effective tax rate (21.9% to 31.1%).

This was mainly as a result of the secondary tax on companies (“STC”) on the dividend paid to shareholders in December 2003, and a decrease in the proportion of income earned in tax jurisdictions subject to a lower corporate tax rate than that of South Africa.

Commenting on the results, Thys du Toit, chief executive officer of Coronation Fund Managers says, “The South African business produced a good performance as a result of strong recurring income and superior local investment returns, particularly in the retail market where the strength and consistency of returns across the Coronation product range received much industry recognition.

Even though our international money raising efforts are starting to bear fruit, the results of the international business, which operates in the alternative strategies arena, remained subdued due to rand strength and lower performance fees.”

Against a backdrop of further consolidation within the asset management industry, Coronation Fund Managers maintained its share of the retirement fund market.

The collective investments industry grew by 19% over the period fuelled by strong domestic equity performance and inflows to money market funds.

“Unfortunately, this strong performance has not yet translated into significant new equity business for the industry and the strong rand continues to deter investors from investing in international products,” says Du Toit.

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