Miton Group Plc - Final Results

Miton Group plc (the 'Company' or 'Group'), the AIM quoted asset management group, today announces its final results for the year ended 31 December 2018 (the 'Year').

2018 Results

·      £4,376 million closing Assets under Management ('AuM'), up from £3,823 million at the start of 2018 (+14%)

·      £1,019 million net inflows (2017: £494 million) (+106%)

·      Average AuM was £4,369 million (2017: £3,361 million) (+30%)

·      Adjusted profit before tax increased by 34% to £9.2 million (2017: £6.8 million)

·      £25.5 million of net cash as at 31 December 2018 (2017: £19.9 million)

·      A total of 5,502,180 ordinary shares of 0.1p each in the Company ('Ordinary Shares') acquired and cancelled during the Year at a cash cost of £2.6 million (2017: 15,152,963 Ordinary Shares)

·      Proposed dividend of 2.0p (+43%) and the introduction of an interim dividend in 2019

Fund highlights

·      81% of funds are first or second quartile1 (2017: 87%; 2016: 86%)

·      The equity fund range grew by 27% to end the year at £3,015 million (2017: £2,379 million)

·      LF Miton UK Multi Cap Income Fund continued to see strong demand ending the Year with £1,265 million of AuM (+25%)

·      LF Miton European Opportunities Fund celebrated its three-year anniversary in December and is the best performing fund in the IA Europe sector over three years and since launch. The fund saw net inflows of £210 million in the Year growing its AuM to £364 million at the year end (+101%)

·      LF Miton US Smaller Companies Fund was launched in March and finished the Year as the second-best performing fund in the IA US Smaller Companies sector since inception. The fund gained strong traction and contributed to the aggregate AuM being managed by the US team which ended the Year at £626 million (+64%)

Current Trading

·      £4,565 million unaudited closing AuM at 28 February 2019

·      Neutral net flows for the year to date

Overall, the strength of our strategies, the effectiveness of our distribution and our scalable platform, supported by our robust financial foundations, give us confidence in Miton's future."

 

 

2018
£m

2017

£m

%

Closing AuM

4,376

3,823

+14

Average AuM2

4,369

3,361

+30

Net revenue

27.5

21.8

+26

Adjusted profit before tax3

9.2

6.8

+34

Profit before tax

8.9

6.2

+43

Total cash

25.5

19.9

+28

 

 

pence

 

pence

%

Adjusted earnings per share4

4.69

3.60

+30

 

 

 

 

Proposed dividend per share

2.00

1.40

+43

 

Chairman's Statement

After my first full year as Chairman of Miton Group plc, I am pleased to see continued development against our strategic objectives.

A year of positive progress

It has been a year of significant growth for the business. Pleasingly, we have seen great momentum across much of the fund range, with record net inflows, along with an increase in profitability of the Group.

Despite the uncertainty in markets, Miton's trajectory remains clear. We continue to foster a culture that puts our customers at the heart of our business model. We aim to be recognised as a leading active investment management business, and we seek to deliver premium value for our clients through superior investment performance over the medium to longer-term.

Results

2018 was a profitable year for the Group, driven largely by the rise in average AuM. This contributed to an increase in profit before tax of 43% to £8.9 million.

September 2018 saw the cessation of the Growth Share Plan ('GSP'), under which equity was issued to participants where funds had achieved growth and profitability. We introduced a structural change to the Group's cost base as all fund managers are now rewarded via a revenue-based structure. This will result in greater clarity of earnings and no future shareholder dilution.

The Group continues to pursue its financial objectives to increase profitability over time by growing AuM through the provision of attractive returns to clients. Miton's message centres on offering value for money funds with clearly defined objectives.

In 2018 we increased our marketing efforts and invested in our digital assets to promote the differentiated characteristics of our products. In 2019, we look to build our brand further and reach more clients.

The Group is robustly financed with no debt and cash balances as at 31 December 2018 of £25.5 million.

Charitable activity

During the year Miton continued its support of the National Youth Advisory Service ('NYAS'), a rights based charity providing a variety of services for children, young people and adults in the UK. I am pleased to report that in 2018 the Group committed further support to NYAS in the years to come.

Dividend

The Board is recommending an annual dividend payment for 2018 of 2.0p per share, representing an increase of 43% on 2017. Over the past three years, the Group's dividend has increased by an average of 44% per annum.

If approved by the shareholders at the Annual General Meeting on 15 May 2019, the dividend will be paid on 21 May 2019 to shareholders on the register at the close of business on 12 April 2019. The ex-dividend date is 11 April 2019. The Company, through its Registrar, has in place a DRIP which allows shareholders to use their dividends to purchase further ordinary shares in the Company. The last election date to participate in the DRIP is 30 April 2019.

From 2019 the Group will introduce an interim dividend to ensure smoother returns to shareholders.

The Group seeks to maintain its progressive dividend policy with a focus on growing the dividend over time reflecting its profitability.

We also recognise that the retention of a material level of profit within the business is important for stability, future endeavours and organic growth. The Directors' intention is therefore to maintain a strong balance sheet with sufficient capital resources to support the business and to grow organically whilst taking a long-term view.

Outlook

The second half of 2018 saw several uncertainties arise connected to the economic and political landscape. The factors driving these uncertainties will continue in 2019, along with challenging market conditions. It is the Board's belief that the commitment, enthusiasm and skills of Miton's people, along with its robust financial strength, will serve it well during these times.

Effective communication of the Miton brand is key to our success and the ability to capitalise on the progress of recent years. Many of our genuinely active products blend well with passive products and offer transparent objectives for our clients and their advisers. Whilst we recognise the significant challenges in the economic landscape, we continue with our strategy to raise our presence in the UK.

We are encouraged by the achievements of 2018, and the momentum it brings to 2019. We look forward to realising the full potential Miton has to offer - for its clients and shareholders alike.

Jim Pettigrew

Chairman