Mixed results for major investors in South Africa

 ·5 Jun 2024

South Africa’s largest private investor Ninety One has been hit hard by outflows, while its smaller competitor has posted a stronger set of financial results.

Ninety-One, which was crowned the largest private asset manager in South Africa by Alexander Forbes’ latest Survey of Retirement Fund Investment Managers, had a tough financial year that ended on 31 March 2024.

“Ninety One, and many other public-markets-centric active investment managers, faced headwinds over the reporting period,” said CEO Hendrik du Toit.

“Despite these conditions, we delivered robust financial results. Looking ahead, we remain confident of the underlying strength of our business and the long-term relevance and quality of our proposition to clients.

“Despite short-term challenges, our attention is firmly fixed on the compelling long-term opportunity”.

Average AUM declined by 8% and Ninety One experienced saw net outflows of £9.4 billion.

The group’s basic earnings per share, however, increased by 1%. Basic headline earnings per share still dropped by 8%, while the dividend dropped by 7% to 12.3 pence (R2.90)

Despite the drops, the figures did increase slightly in rand terms as the rand significantly weakened over the reporting period.

Assets under management (£’bn)129.3 (R2.65 trillion) 126.0 (R2.96 trillion)-3%
Average assets under management (£’bn)134.9 (R2.7 trillion)123.9 (R2.91 trillion)-8%
Basic earnings per share (p)18.2 (R3.72)18.4 (R4.23)+1%
Basic headline earnings per share (p)17.3 (R3.54)15.9 (R357.57)-8%
Dividend per share (p)13.2 (R2.80)12.3 (R2.90)-7%
Average R20.46/£ in FY23 | Average R23.54/£ in FY24

Despite having substantially fewer assets under management, Sygnia was able to see its AUM grow over the period.

In the first six months Ended 31 March 2024 (H1 2024), the group’s Assets under management and administration increased by 9.1% to R341.3 billion (H1 2023: R312.7 billion).

Revenue increased by 8.7% to R444.2 million (H1 2023: R408.6 million), while basic earnings and headline earnings per share jumped 9.7% to 100.7 cents (H1 2023: 91.8 cents).

An interim dividend per share increased to 90 cents (H1 2023: 87.0 cents)

Financials H1 2023H1 2024Change
Assets under management and administrationR312.7 billion R341.3 billion+9.1%
RevenueR408.6 millionR444.2 million+8.7%
basic earnings and headline earnings per share91.8 cents100.7 cents+9.7%
Interim Dividend87 cents90 cents+3.44%

In terms of South Africa’s outlook, Syngia said that the demands facing the government have not changed despite the ANC losing its majority,

“The options facing the ANC at the time of writing are to form coalitions or to govern as a minority government. From an investment perspective, much will depend on what political choices and compromises are made in the weeks ahead, as these will determine to what extent democracy in South Africa can be preserved,” said the group.

“Whatever happens, the demands on the government have not changed. Foreign investment, a focus on fixing dysfunctional municipalities, and fiscal prudence remain economic priorities.”

South Africa’s problems include GDP growth expected to average around 1%, inflation only expected to stabilise to the 4.5% midpoint by midyear, no light at the end of the greylisting battle, and a slim chance of the Monetary Policy Committee reducing interest rates.

“On a positive note, South Africa remains a destination of choice for tourists and cannot be completely ignored on the global stage.”

“It is important to remind ourselves that the “s” does not denote a plural in the BRICS alliance and that South Africa has proven itself to be a resilient country.”

Read: The 11 best universities in South Africa – with two climbing the global rankings

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