Hits: 12

14 July 2020

Ashmore- Trading Update

Share Price 427p

Mkt Cap £3,049m

Conflict Disclosure: No Holding 

  • Update Net outflows were 2.9% while markets added 6% to AUM lifting total AUM to $83.4bn. Performance in fixed income on a 1 and 3 year view remains below benchmark despite a positive quarter.
  • Estimates 5% revenue decline is forecast to June 2021 which compares to a 6% AUM decline from June last year.
  • Valuation EV/AUM 3.3%. PE 16.6, Yield 4%
  • Conclusion Share look fairly priced but with 3 years of underperformance it is possible to wonder how long it will take to reverse the flows. Nothing to see here.

16 April 2020

Ashmore Group – Trading Update

Share Price 335p

Mkt Cap £2,384m

Conflict Disclosure: No Holding

 

  • Update Net outflows were 3.6% over the quarter which combined with investment performance -18.3% to reduce AUM 22% to £76.8bn. All asset classes suffered negative performance.

 

  • Estimates The 7.6% forecast PBT increase to £226m is too high for June 20.  High operating margins are great in strong markets but can be a double edged sword.

 

  • Valuation PE 12.9, yield 5% pre downgrades. EV/AUM 2.5%

 

  • Conclusion Shares are down 40% in March and are starting to look cheap. Just I wonder if emerging market debt may stay out of favour for some time.

6 February 2020

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Ashmore– H1 Results 

Share Price 553p

Mkt Cap £3.94bn

Conflict Disclosure: No Holding

  • Results Revenue was up 20% to £177.3m from AUM up 28% year on year to $98.4bn.. EBITDA up 24% to £122.5m and a contribution from seed capital items of £8.4m meant that PBT was up 48% to £132.8m. Cash was £427m from net assets of £810m. 12 month performance has tailed off with only 24$ outperforming benchmarks. Outlook is well positioned to grow in keeping with the trend of higher investor allocations.
  • Estimates Full year to June estimates anticipate £251m PBT. The company has delivered 52% of this in H1 when AUM grew 7%. Stripping out seed capital returns 49% of the full year estimate was delivered in H1, suggesting estimates may be perhaps 5% too low.
  • Valuation PE 19.5X Yield 3.3%
  • Culture The CEO owns 37% of the equity so it is no surprise to see no LTIP in existence, merely a bonus deferral scheme. However the CEO total comp last year of £3.6m may merit a 32 page remuneration report.
  • Conclusion With 87% of AUM being from institutions there may be reason to have concern over the sustainability of the fees although this is a highly specialist asset class. Hard to fault and cheaper that Gresham House, Impax, and Liontrust. The flows show it is one of the winning specialists

15 January 2020

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Ashmore Group – AUM Update 

Share Price 547p

Mkt Cap £3,898m

Conflict Disclosure: No Holding

  • Update Net inflows of 3.6% over the quarter coupled with market tailwinds lifted AUM 7% over the quarter to December 2019 to US$ 98.4bn. Relative performance is good over 3 and 5 years in fixed income but over 1 year is weaker with the exception of equities which accounts for 5.2% of AUM. Outlook refers to a positive outlook for emerging market flows and says the company is well positioned.
  • Estimates 19% PBT growth is expected for the full year to June predicated on 13% revenue growth to £357m. With 7% AUM growth in H1 this looks reasonable.
  • Culture 8 Reviews on Glassdoor award a score of 3.4 out of 5. Comments range from “nice place to work” to “nice people terrible culture”.
  • Valuation EV/AUM 4.6%. PE 19.4X Yield 3.3%
  • Conclusion The statement says that underperformance is to be expected at times of market volatility where risk is added to capture long term upside. With the shares at an all time high they look up with events.

15 January 2020

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Ashmore  – Trading Statement  

Share Price 518p

Mkt Cap £3.49bn

Conflict Disclosure: No Holding

  • Statement AUM up 7.6% over the quarter to $91.8bn. Net inflows were 3.9% with market tailwinds of 3.7%. Net inflows across the board except for equities that experienced a small net outflow.
  • Estimates.  Revenue in H1 was £152.1m. FY to June 19 anticipates £311m revenue which is a 4% increase on H1. They should beat that. Fot the year going forward a 17% revenue increase is anticipated which compares to AUM 24% ahead of a year ago.
  • Valuation  PER 18.1X, Yield 3.5%. EV/AUM 3.9%
  • Conclusion The high valuation is perhaps correctly anticipating upgrades after a strong year. This one doesn’t go in straight lines. Time to take some off the table.

12 July 2019

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Ashmore  – Trading Statement  

Share Price 518p

Mkt Cap £3.49bn

Conflict Disclosure: No Holding

  • Statement AUM up 7.6% over the quarter to $91.8bn. Net inflows were 3.9% with market tailwinds of 3.7%. Net inflows across the board except for equities that experienced a small net outflow.
  • Estimates.  Revenue in H1 was £152.1m. FY to June 19 anticipates £311m revenue which is a 4% increase on H1. They should beat that. Fot the year going forward a 17% revenue increase is anticipated which compares to AUM 24% ahead of a year ago.
  • Valuation  PER 18.1X, Yield 3.5%. EV/AUM 3.9%
  • Conclusion The high valuation is perhaps correctly anticipating upgrades after a strong year. This one doesn’t go in straight lines. Time to take some off the table.

16 April 2019

Ashmore Group – Trading Statement  

Share Price 455p

Mkt Cap £3.06bn

Disclosure No holding

  • Update 6.5% net inflows combined with help from markets help AUM to rise 11.2% over the quarter to $85.3bn.
  • Estimates assume a 5.5% increase in revenue over the 12 months to June 19. With AUM now up 11.5% over the 12 months this looks light
  • Valuation EV/AUM 3.2%. PER 17.5X yields 4%
  • Conclusion Expensive but it usually is. I sense the market underestimates the fee margin contraction in this specialist asset class suggesting that perhaps the best returns have been had from this high margin business.  But this is a positive update

14 February 2019

Ashmore – H1 Results 

Share Price 413p

Mkt Cap £2.95bn

  • Results Revenue growth of 13% driven by 18% menegement fee growth and £1.2m performance fees.  Adjusted EBITDA up 8% to £98.8m delivering a normal and huge 67% operating margin. The mark to market on the seed investments reduced PBT 6% to £93m. Adjusted diluted EPS was up 6% to 10.9p. Interim dividend maintained. The outlook refers to a positive start to 2019 with renewed capital flows to emerging markets.  Unusually the CEO with a 39% shareholding announces his intention to sell 4% of the company each year post results.
  • Estimates Forecasts are predicated on 7% revenue growth to June 19 which compares to 13% revenue growth in H1 and with renewed capital flows post the period end this looks well underpinned.
  • Valuation PER 16.5 yield 4.3%. EV/AUM is 3% which given the 67% operating margin is relatively cheap
  • Conclusion The declaration that the CEO will sell 4% of the company post results would normally cause investors to hold back and consequently overhang the price. However with renewed inflows at 67% margin this may test the nerves of those waiting on the sidelines. There has always been cause to expect competition to reduce the operating margin but it has never happened.  On the basis the margin is sustainable the shares are cheap.

15 January 2019

Ashmore Group – Trading Update 

Share Price 379p

Mkt Cap £2.7bn

  • Update AUM increased 0.4% to $76.7bn made up of net inflows of 0.6% mitigated by market declines of 0.2%. Equities showed the strongest inflows
  • Estimates Assume 8% revenue growth in the year to June 19.  AUM is now 10% ahead of where it was in December 17 which coupled with equities revenue providing a higher yield than debt funds means estimates look reasonable
  • Valuation PER 14.9X and yield 4.6%. EV/AUM 3.3%
  • Conclusion The shares are down 13% from their March 2018 high and are looking reasonable value for the first time I can remember.

13 July 2018

Ashmore Group – Trading Statement  

Share Price 351p

Mkt Cap £2.5bn

·         Update 3.4% net inflows were offset by negative markets resulting in a decline in AUM of 3% to $73.9bn. External debt and blended debt were the main culprits reducing AUM by 5% each while corporate debt was up 4%

·         Estimates Not withstanding the last quarter AUM over the last 12 months are up 25%. Concensus looks for 7% revenue growth followed by 13% in the year to June 19.  Looks comfortable.

·         Valuation EV/AUM is c 3.4%. PER 14.4X to June 19 and yield 4.5%

·         Conclusion The shares have come back 20% from their highs in February on the back of weak debt markets.  The shares now look cheap and the net inflows have mitigated weak markets. This now looks like a reassuring statement and the shares should bounce