Published on Companies House this week, Neptune said that, while the group’s “high-conviction, active equity-based portfolios” have generated long-term outperformance, in the last two years, the group has seen “significant headwinds”.
“First, the abnormally loose monetary policy of central banks, in response to the financial crisis, has seen flows of risk capital into bonds and largely out of equities. Secondly, this trend has run in parallel with flows out of emerging markets and into developed markets. Neptune is much more internationally positioned than most of its UK-centric competitors and this strategic strength has had a short-term negative impact, exacerbated by the current overvaluation of sterling,” the group wrote.
As a result of this, assets under management at the group fell 7.8% to £5.4bn, while group revenue fell 14% “with gross sales and positive market movements being outweighed by gross redemptions.”
Neptune’s gross profit margin fell to 51.3% from 53.6%, while fee income fell from £82.94m to £71.68m.”
Outlook
The group is, however, a great deal more positive about the future.
Chairman, Jonathan Punter said: “we can now see that the headwinds are beginning to reverse. Significant flows into bonds have stopped and we are seeing net investment into equities for the first time in over a decade. Emerging markets equities are at a ten year low compared to developed markets and this trend is due to reverse.”
As a result of this, CEO Robin Geffen added: “Netune is in a strong position to exploit an upturn in demand for our core product: high conviction, actively managed equity funds. The last two years have been testing and demanding, but we expect a more positive forthcoming global macroeconomic environment.”
For the year, the group paid out a 90p per share dividend, the same as 2012 but, this was paid out of reserves, because it resulted in a retained loss for the year of £1.22m compared to 2012’s profit of £3.64m.
