Henderson Falls Most Since April as First-Half Profit Drops

Aug 07, 2014 12:16 pm ET

(Updates with shares at close in second paragraph.)

Aug. 7 (Bloomberg) -- Henderson Group Plc fell the most in four months in London trading after the money manager said profit fell and flows may slow in the U.S.

The company fell 5.6 percent to 228 pence in London trading, the biggest drop since April 8, and the worst performer in the FTSE 350 Financial Services Index. Underlying pretax profit in the first half fell to 97 million pounds ($163 million) from 101.1 million pounds in the year-earlier period, Henderson said in a statement today.

Henderson paid as much as $200 million for Milwaukee-based U.S. equity manager Geneva Capital Management Ltd. in June, joining other U.K.-based firms including Schroders Plc and Legal & General Group Plc, that are looking to expand in North America. Growth will slow in the U.S. after an “exceptional” start to the year, Chief Executive Officer Andrew Formica told reporters by phone.

“Profit was 8 percent less than we were looking for,” said David McCann, an analyst at Numis Securities Ltd. Assets under management were “five percent lower than what we had hoped for.”Numis has a reduce rating on the stock at a price target of 215 pence.

Assets under management rose to 74.7 billion pounds from 67.9 billion pounds. Henderson, whose shares are traded in London and Sydney, had net retail inflows of 4.7 billion pounds “from a broadening international footprint,” it said. Henderson is gaining share in its biggest markets, and the acquisition of Geneva Capital will “extend our U.S. institutional client base,” Formica said.

Costs climbed 16 percent to 171.2 million pounds. Henderson said 86 percent of its funds outperformed relevant metrics over three years. The company increased its dividend to 2.60 pence a share from 2.15 pence.