Pendal shares jumped nearly 7% yesterday (after a similar rise on Friday) in the wake of the investment group’s interim result which included a cut in the dividend.
The shares ended the day at $6.05, up 5.1% for the day after touching a high of $6.28 the highest price since March 6.
Rather than be upset about the weak earnings and cut to dividend, the prudential nature of the reduction (keeping more cash in the company) was welcomed.
The interim was cut 25% to 15 cents a share for shareholders.
Chairman James Evans explained the reduced payout was “due to COVID-19 and the uncertainty of potential future impacts on fund flows, markets, client sentiment and economies…the Board is confident in the company’s ability to weather the impacts of the pandemic, (and) it believes it is prudent and sensible to reduce the interim dividend.
The company reported a 2% increase in average funds under management to $98.6 billion but statutory earnings fell 21% $54.8 million while Cash net profit after tax edged up 2% to $86.6 million.
Its performance fee revenue also fell by 86% as a number of equities funds failed to beat the benchmark in the past year.
The global funds management firm announced the expansion of its impact investing arm, Regnan with the launch of its first financial product in this business.
“This segment of the market is fast-growing,” Pendal chief executive Emilio Gonzalez said in the statement.
Shares remain well under the year high of $9.33 in late February just as the COVID-19 pandemic started sweeping across the world.
