Henderson reports lower revenue for 2016
Henderson Group has reported a 13.4 per cent drop in revenue at the end of December, 2016, which was driven by lower performance fees as well as significant market volatility and the unfavourable FX movements, according to its statement “Full year results 2016 – US GAAP”
The company also posted a 46.5 per cent decrease in its net income which was dragged down by lower operating income and lower investment gains compared to 2015 and an increased tax charge for the period.
At the same time, the adverse FX movements led to a 5.1 per cent drop to $867.8 million in the group’s management fees, which accounted for the group’s principal revenue stream.
According to Henderson, management fees performance was particularly affected by the unfavourable movements of the pound sterling, the firm’s ‘functional currency’, which significantly weakened against the US dollar in that period.
Following this, management fee margins went down to 66.9 basis points (bps), driven by mix shifts following outflows from retail products and institutional inflows, and other one-off effects.
In 2016, the company also posted lower operating income, which fell by 26.9 per cent, due to lower revenue.
The group’s assets under management (AUM) decreased by eight per cent counting year-on-year, or $10.8 billion, and net outflows of $5.3 billion which was partly offset by positive market movements of $7.6 billion.
According to the group, the negative FX movements reduced its AUM by $13.1 billion as the US dollar strengthened against all major currencies.
Henderson said that during that period around 80 per cent of its AUM was non-USD denominated.
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