Good start to year may be marred by epidemic

A GOOD start to the year by Anchor Group, which saw the asset management company attract net inflows of more than R2 billion in the first two months, could be undermined by the Covid-19 crises

The recent global spread of the disease has seen global equity markets tumble.

“The financial impact of the virus will only be clear once the extent of the spread of the virus is known and the global supply chain interruptions and consumption patterns caused by social isolation are fully understood,” Anchor said.

For the year to end December, the group reported an increase in earnings with turnover rising by 0.43 percent to R466 million, while profit from continuing operations surged by 24 percent to R108.66m.

Anchor earned a once-off gross termination fee of R70.4m relating to the Astoria investment management agreement, which is included as part of revenue.

The net impact of this fee was excluded from adjusted headline earnings as it was once-off in nature. Anchor’s headline earnings per share (Heps) for continuing operations increased by 28 percent to 37.5 cents a share while earnings per share (Eps) for continuing operations increased by 35 percent to 42.6c.

The group declared a final dividend of 7c a share, taking the total dividend to 16c for the year, a 20 percent decline compared to last year’s 20c.

Assets under management and advice increased by 17 percent to R57.4bn.

The group has three primary divisions: private clients, asset management and stockbroking.

Its long-term strategy is to become a major player in South African asset and wealth management, with an increasing focus on offshore investment through organic and acquisitive growth.

Looking ahead, Anchor said it was well-placed to weather the storm after its annuity equity-related earnings were directly impacted by the market decline.