The Janus Henderson Group Plc (ASX: JHG) share price is currently down almost 2% after reporting its FY18 result yesterday evening.
Janus Henderson is a global asset management business headquartered in London, UK. It offers a wide range of financial products to individuals, advisors and institutional investors around the world including in the US, UK and Australia. It currently manages more than US$325 billion of assets, it has more than 2,000 employees worldwide and has 28 offices across the globe.
Janus Henderson FY18 Result
Janus Henderson reported its result for the year ended 31 December 2018 at 7.45pm Australian Eastern Daylight Time yesterday.
The funds management business was a merger between Janus and Henderson during the 2017 year, so all ‘pro forma’ results are as if the business merged at the start of FY17.
Janus Henderson reported that revenue grew by 0.4% to US$2.306 billion. However, net income attributable to Janus Henderson fell by almost 26% to US$523.8 million and earnings per share (EPS) declined by 26.4% to US$2.61.
However, on an adjusted basis attributable net income increased by 9% to US$549.6 million and EPS grew by 10.5% to US$2.74.
Assets under management (AUM)
During the last quarter of FY18, AUM fell by 13% to US$328.5 million, which reflected negative market conditions and net outflows of US$8.4 billion. This led to a decrease of management fees.
Brexit?
With Janus Henderson’s HQ and a large part of earnings based in the UK, Brexit is important.
The funds management business sought to reassure investors, “We have completed our contingency preparations, and we are in a strong position to continue to serve investors in the UK and EU irrespective of the outcome.”
Dividend and share buy-back
Janus Henderson has announced that the fourth quarter dividend will be US$0.36, which is a 12.5% increase compared to the dividend paid a year ago.
The funds management business also announced a new share buy-back program of up to US$200 million to buy shares on the NYSE and CDIs on the ASX over the next year.
Management comments
Janus Henderson Group CEO Dick Weil said:
“We made significant progress driving towards merger completion, transforming our two separate legacy companies into Janus Henderson. I am very pleased that we were able to complete our integration efforts and realise our cost synergies of US$125 million well ahead of plan in 2018.”
Is Janus Henderson a buy?
Bond fund manager Bill Gross recently announced his retirement from Janus Henderson, which could be a blow for AUM, particularly the bonds segment.
Analyst consensus estimates were expecting US$540.7 million, so the reported US$523.8 million was a bit of a miss.
The Janus Henderson NYSE shares are trading at 8 times 2018’s earnings, which seems like a fairly cheap price to pay if earnings hold up this year. It’s hard to say what will happen as markets could fall or recover strongly this year.
At this stage in the market cycle, I’m not looking to buy Janus Henderson shares as AUM can go down and investors panic & withdraw funds in a recession. Falling share prices could see management fees drop further. The best time to buy could be in the middle of a recession. That’s why I’m attracted to the proven shares in the free report below.
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