Intermediate Capital surges as FY profit, AuM rise; new dividend policy announced

Shares in asset manager Intermediate Capital surged on Thursday after it reported a jump in full-year profit and assets under management and announced a new dividend policy.

In the year to the end of March, pre-tax profit rose to £252.4m from £158.8m in 2016, with adjusted group pre-tax profit coming in at £237.5m from £175.6m. Total assets under management increased 10% to €23.8bn, with €4bn of new money raised.

Shore Capital had been expecting AuM of €22.6bn and adjusted pre-tax profit of £216.2m.

Investment Company pre-tax profit came in at £163.5m, up 43% from 2016, while Fund Management pre-tax profit rose to £74m from £61.2m.

Chief executive officer Christophe Evain said: "The market environment continues to be supportive of both our existing and new strategies and we see strong, ongoing demand from investors for diversified sources of higher yield, as well as attractive investment opportunities for our funds.

"We remain confident in our ability to innovate and pioneer new strategies, backed by our balance sheet capital and disciplined investment culture, as we have seen with our Strategic Secondaries strategy. The increasing diversity of our business has ensured that we are well placed to build on this success."

The company proposed a final ordinary dividend of 19.5p per share, up 23% from the previous year. Total ordinary dividends in the year were up 17% to 27.0p per share, in addition to the £20m special dividend paid in August last year.

Intermediate Capital also announced a new dividend policy, saying it now recommends a dividend payout of 80-100% of the post-tax profit of the Fund Management Company. It currently expects to recommend growing the dividend per share by 6 to 8% per year.

At 1215 BST, the shares were up 11% to 898p.