Henderson warns investors spooked by volatility

City A.M. Reporter
Henderson is bracing for further volatility in global stock markets and the challenge of keeping cash flowing in as retail investors fight shy of investments for a few months.

Chief executive Andrew Formica said the dramatic stock falls seen in recent weeks had spooked investors, and its effects would not be forgotten in a hurry.

"Even if markets return to the highs of the year, we think the psychological effects of market movements seen in the last few weeks will likely deter retail investors in particular from investing at a similar pace (to that) we have seen over the past few years," Formica told a conference call.

Henderson has reported £86.4m underlying profits before tax for the first six months of the year, in line with its own estimates published last month, and said it would pay interim dividends of 1.95p per share, compared with 1.85p paid last year.

Previously reported assets under management were confirmed at £74.4bn.

Analysts at Numis expected interim dividends to amount to 2p, while their counterparts at Peel Hunt have forecast dividends to remain unchanged.

Retail investors accounted for the only inflows the group recorded in the first half of the year. It attracted £285m net inflows from clients such as retirement savers and private individuals, while institutional investors and insurer Phoenix withdrew around £3.1bn.

Formica said it would be "prudent" in these brittle markets to keep an eye on costs but added Henderson was not looking at staff redundancies. Instead, the company was making sure its spending habits were "consistent with a maybe more difficult outlook".

"Travelling and entertainment, marketing, any operating costs such as what you are spending in your IT area, new recruitment in areas where if you do not see growth you would expect, you could hold back on," he told reporters.

The company's shares were trading down one per cent at 140.6p this morning, roughly in line with a 0.71 per cent dip in the FTSE 250 index .