Henderson ready to hand back extra £200m as profits leap

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The Independent Online

The fund management group Henderson mooted plans to hand back up to an additional £200m to shareholders next year, as it unveiled a better-than-expected set of first-half results yesterday.

Profits from continuing operations at the asset manager leapt 31 per cent to £46.2m in the first six months of the year, as the group continued to shift its focus to higher-margin products.

Although the company saw net outflows of almost £3bn from its lower-margin institutional business, partly as a result of continued poor performance, the rest of the group saw net gains.

The chief executive, Roger Yates, said that although the continued poor performance of the institutional business was disappointing, outflows were now coming down, and were much less than the £4.5bn during the same period last year.

Henderson has already confirmed that it plans to hand back some £200m to shareholders this autumn, subject to approval by investors. However, Mr Yates said yesterday that he believes the company may now be able to hand back a further £150m to £200m next year.

Having pulled out of the auction for the rival fund manager Gartmore earlier this year, Mr Yates said the company was now focused on organic growth, and preferred to hand back excess cash to shareholders rather than hold on to it for acquisitions - as has been Schroders' strategy. "If we need cash [to make acquisitions] in the future, then we will simply go and ask shareholders for it," he said.

Analysts upgraded full-year profit forecasts for the group on the back of the results. Geoff Miller, an analyst at Bridgewell Securities, said the results were impressive, although added that he continues to favour Schroders. "The management should be given credit for delivery of value to shareholders," he said. "Our neutral recommendation reflects the more compelling value available elsewhere in the sector."

Shares in Henderson rose 11 per cent to all-time highs of 91.75p, giving the company a market value of £1.1bn. The stock has now climbed 34 per cent over the past year.