Good afternoon, ladies and gentlemen, and welcome to the Premier Miton Group plc Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it's appropriate to do so on the Investor Meet Company platform. Before we begin, we would just like to submit the following poll and if you could give that your kind attention, I'm sure the company would be most grateful.
I would now like to hand you over to the executive management team from Premier Miton Group plc. Mike, good afternoon, sir.
Good afternoon. Hello everyone and thank you for joining us today. I'm Mike O'Shea. I'm the Chief Executive of Premier Miton, and I'm joined by our CFO, Piers Harrison, and we're here to present our interim results for the six months ended March 31st of 2025. Let's begin with the highlights from the first half of FY 2025. Despite persistent macroeconomic uncertainty and market volatility, Premier Miton continues to demonstrate resistance and adaptability. We closed the period with GBP 10.2 billion of assets under management, and 71% of our funds have outperformed their respective sectors since inception or fund manager tenure. That's nearly three out of every four funds outperforming, which is an achievement we're proud of. We delivered an adjusted profit before tax of GBP 5.4 million and our cash position remains healthy at GBP 31.2 million.
Importantly, we're seeing a strong pipeline of opportunities across our fixed income, absolute return, and several of our equity strategies. We also completed a comprehensive operational infrastructure review, identifying GBP 3 million in annual run rate savings, efficiencies that will support future growth without compromising our investment capabilities. Since the period end, it's pleasing to note that assets under management have risen to GBP 10.4 billion. Our product mix continues to evolve in a way that strengthens our business. Today, we are a genuinely diversified asset manager. Fixed income and absolute return strategies now account for a significant share of our assets under management alongside our established equity and multi-asset offerings. This deliberate diversification strengthens our ability to meet evolving client needs and positions us well, I think, to capture flows in high demand areas.
It also allows us to serve a broader range of client needs and reduces our reliance on any single asset class or market condition. It also positions us well to capture flows in areas where we see growing demand, particularly in income-generating and risk-managed strategies. I wanted to just take a moment to talk about what's happening in the markets right now because while there's a lot going on, we're seeing some real opportunity in the current environment. The macro environment is shifting. We're seeing a pivot in global leadership with the U.S. facing trade tensions, potentially a recession, and a slowdown in the so-called Magnificent Seven tech stocks. Meanwhile, U.K. and European markets are showing renewed strength, and smaller companies, which have long been overlooked, are finally beginning to reassert themselves, which is good news.
Consumer behavior is also changing and there's a clear move toward value with discretionary spending under pressure. These dynamics are creating a more complex and volatile market backdrop. These are exactly the types of conditions where active management can really add value and where our teams are well-equipped to find opportunities. Our investment performance remains a key differentiator. As of April, 71% of our funds and 68% of our assets under management are outperforming since launch or manager tenure. I mentioned above that a more complex, and volatile market creates opportunities for active managers, and it is encouraging to see our very short-term numbers improving. We have seen 70% of our funds performing above median and almost half delivering top quartile performance so far this calendar year, for example. This number excludes our absolute return strategies, which are also delivering on their objectives.
This consistency reflects the depth of our investment expertise and the strength of our conviction-led approach. It reflects the strength of our investment teams, the rigor of our investment processes, and our commitment to genuinely active management. In a world where investors are seeking complementary active strategies, our approach is delivering real value. I just want to delve down into a couple of key areas of performance in more detail. Our fixed income franchise has become a cornerstone of our diversified offering. With assets under management now at GBP 2.1 billion, this segment has grown substantially, and this growth reflects both strong client demand and the credibility of our investment team. Our investment approach is active, flexible, and unconstrained.
We invest across sectors, across geographies, and across credit qualities, and this allows us to adapt to changing market conditions. The performance of our flagship funds, Corporate Bond Monthly Income and Strategic Monthly Income, have been consistently strong, with both ranked in the top quartile of their sectors. Strategic Bond has delivered market-leading performance and attractive risk-adjusted returns against its major peers in the sector, which I think positions us strongly to attract future flows, and scale further in this key area. We've also expanded internationally with the launch of the Global Dynamic Credit Fund in Dublin, which is an identical strategy to our U.K.-based Strat Bond, but denominated in U.S. dollars. This opens access to significant opportunities for addressable offshore demand. This not only diversifies our investor base but it also enhances our ability to scale outside the U.K.
We have a healthy pipeline of potential new business developing as a result. Our absolute return strategies are also increasingly relevant in today's environment. Market volatility, macro uncertainty, and style rotation all create opportunities for strategies that can go both long and short. With volatility elevated and macro uncertainty persisting, the ability to generate returns from both rising and falling stocks is a powerful advantage. The Premier Miton Tellworth UK Select Fund, for instance, has delivered both strong performance and low volatility. The team's ability to identify both winners and losers across the U.K. equity market, while maintaining factor and market-neutral positions, has been a key differentiator for this strategy. Tellworth's success is also a testament to our M&A strategy.
Since the acquisition, the team has been fully integrated, their assets under management have grown significantly, and they are now a core part of our absolute return offering. Importantly, the team has remained intact and motivated, and that's a testament to the cultural alignment, and shared ambition. It's a clear example of how we at Premier Miton can identify, acquire, and scale high-quality investment talent. We continue to manage other absolute return strategies, including the Premier Miton Alternative Investments Fund, which is now at GBP 126 million, and this provides clients with differentiated sources of return and risk management. We're also seeing strong demand for absolute return segregated mandates. Our distribution strategy continues to build momentum and broaden our reach.
We were pleased to welcome over 200 attendees to our annual conference in February, an event that not only showcased our investment capabilities, but also reinforced the strength of our relationships across the advisor and wealth manager community. Our recent brand refresh has been well-received. It's more than just a new look. I think it reflects our evolution as a business and our ambition to grow. We've now launched targeted, product-specific advertising campaigns to further raise awareness, and to drive engagement with our key strategies. We're also seeing real traction in our offshore distribution efforts. The launch of two new funds this spring, Global Credit, that I've already mentioned, and U.S. opportunities, has expanded the product mix and opened new channels for growth.
In addition, we've established a new distribution channel via South Africa, and we've launched a managed portfolio service range, which is helping us reach a broader client base and meet the growing demand for outcome-oriented solutions. Our distribution team is active, it's energized, it's increasingly effective, and they're not only deepening existing relationships, but also opening new doors for us, ensuring that our high-conviction, actively managed strategies are front of mind with advisors and with allocators. In short, we're seeing a step change in our distribution capability, one that positions us well to capture market share as conditions improve. With these foundations in place, we're confident in accelerating our reach and deepening our engagement across all of our main channels. As we look ahead, we believe Premier Miton is well-positioned for the next phase of growth.
We are entering a bifurcated world where passive strategies dominate the low-cost core, but active managers are increasingly sought after for alpha generation and risk management and control. Our high active share and high tracking error metrics reflect our conviction-led approach. We don't hug benchmarks. We aim to outperform them, and this is exactly what our clients are looking for in a more volatile, less predictable world. We have ample capacity across our fund range and a strong pipeline of new ideas and a culture that encourages innovation and accountability. This is a business that encourages people to think differently, to challenge convention, and to find new ways to deliver value for clients. We're also an attractive home for talent, whether it is fund managers looking for a platform that supports their ideas or teams looking to join a business with momentum.
Premier Miton is increasingly seen as a good home for talent. Our balance sheet is robust, giving us the flexibility to invest in growth, and we've got a track record of executing M&A effectively when the right opportunities come along and where they make strategic sense. In short, we are a diversified active asset manager with the scale, agility, and expertise to thrive in the years ahead. I would now like to hand over to Piers to run through our key financial metrics for the period.
Thanks, Mike. The group continues to generate management fee income based on the level of assets being managed across our investment teams. Now, the assets under management or AUM ended the half year at GBP 10.2 billion, which was a decrease of 5% on the opening position for the period. While the first quarter of the financial year was broadly flat in terms of net flows in AUM, there was a return to market volatility in the second quarter and particularly so in March. Over the six months, we saw net outflows of GBP 254 million and negative market and investment performance of GBP 228 million. Now, the group's average AUM for the period was GBP 10.6 billion, which represented an increase of 6% on the comparative period.
Whilst we saw higher levels of carry-through of average AUM, the blended net management fee margin decreased by 4% to 57 basis points. Now, this decrease continues to be primarily driven by changes in the group's product mix and strong traction in the fixed income range. This has resulted in these products being a higher proportion of our overall average AUM when compared to the previous period. The resulting net management fees for the six months were actually flat on the previous period at GBP 30.2 million. We saw performance fees totaling GBP 2.1 million being generated in the period and a resulting gross profit of GBP 32.4 million. Administration expenses increased by 9% and I will provide some more details shortly on that. The adjusted profit before tax for the period was GBP 5.4 million.
The amortization charge is broadly flat at GBP 2.6 million, and the share-based payments fell 38% to GBP 1.3 million, reflecting the rolling off and vesting of the nil cost contingent share rights. Non-recurring costs of GBP 400,000 related to operational efficiencies, which were completed in the first half of the year, and the resulting profit before tax for the six months was up at GBP 1.1 million. Turning to the administration expenses, these totaled GBP 27.7 million for the six months, and l ike in previous periods, to most financial services companies, the largest portion of our cost base relate to our staff. The fixed staff costs increased by GBP 400,000 to GBP 11.2 million in the period, reflecting staff salary increases and a full six months of the post-Tellworth acquisition salary costs.
The average headcount for the period increased to 164. The variable staff costs increased to GBP 5.7 million for the six months and this increase was primarily driven by performance fee shares in the period. Adjusting for these, the variable staff costs were actually broadly unchanged from the prior period, reflecting the comparable levels of net revenue and the underlying profitability of the group. The overheads and other costs increased by GBP 500,000 to GBP 10.5 million for the period. As Mike mentioned, the additional spend predominantly related to the increased marketing activities and the launch of the group's new visual identity, which took place in February, along with the associated advertising costs there too, and also a full period of the Tellworth related costs.
Now, we continue to take a prudent approach to cost discipline, and as previously flagged in December, we completed the comprehensive review of our operations and identified further efficiencies that are expected to reduce our annual run rate by approximately GBP 3 million while maintaining a resilient and scalable platform. We regularly review and assess our range of funds to ensure that they continue to offer good value and outcomes to investors. During the period, we closed one fund, and after the period in May, we merged another. Indeed, on the 12th of May, we announced the closure of the Emerging Markets Sustainable Fund and the restructure of three global equity funds with the overall investment responsibilities being assumed by the group's CIO.
Now, turning to the balance sheet, the additional GBP 1 million of goodwill recognized in the period relates to the additional consideration due on the first anniversary of the acquisition of Tellworth. As already mentioned, on 31st of March , the group had GBP 31.2 million of cash. If we look at the regulatory capital position, after the interim dividend, the group has a surplus capital of circa GBP 12.8 million. Now, the board has declared an interim dividend of GBP 0.03 per share, and this is unchanged from the interim dividend last year, and indeed, the year before. The dividend will be payable on the 1st of August 2025. As noted in previous updates, the board continues to take a pragmatic approach to the level of dividends. Consideration is given to the balance sheet prudence, the market outlook, and returns to stakeholders.
The stated dividend policy is to target a range of approximately 50% to 65% of profit after tax and that remains unchanged. I'll hand back to Mike for summary.
Piers, thank you very much indeed. I n closing, I want to leave you with a clear message. Premier Miton is built for the current environment and for the future. We are a diversified asset manager with strength across asset classes from equities to fixed income, from multi-asset to absolute return. This breadth allows us to adapt, to innovate, and to meet the evolving needs of our clients. I think we've proven our ability to execute strategic M&A, not just acquiring businesses, but integrating them seamlessly, and unlocking real value for our shareholders. Tellworth is a prime example of that success. I believe that now is a particularly attractive time for further M&A. Valuations across the sector remain compelling. Many smaller firms are facing margin pressure and the need for scale, operational efficiency, and distribution reach has never been greater.
With our strong balance sheet, our proven integration capabilities, and disciplined approach, I think we are well-placed to be a consolidator of choice as this M&A unfolds. Our culture is one of high conviction, entrepreneurial thinking, and accountability, and I think it's a culture that attracts top talent and empowers them to deliver for our clients. In a world that is increasingly volatile, increasingly complex and bifurcating between passive and active, we believe our high conviction, high active share strategies are exactly what investors are looking for. We have the platform, we have the people, and we have the performance to grow. We're well capitalized, we're operationally efficient, and we're strategically focused. Premier Miton has weathered the storm, I think, reasonably well over the last few years, and I really believe we're poised to lead in the recovery, and to capture the opportunities ahead.
I'd like to thank you all for your continued support. Thank you.
Perfect. Mike, Piers, if I may just jump back in there. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated on the right-hand corner of your screen. W hile the team take a few moments to review those questions that have been submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can all be accessed via your investor dashboards. Mike, Piers, you can see that we have received a number of questions throughout your presentation this afternoon. Thank you to all of those on the call for taking the time to submit their questions.
Guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and if I pick up from you at the end, that'd be great. Thank you.
Yeah. Thanks. Thank you very much indeed and thanks everyone for the questions. I'll just run through. We've had a question about a specific stock that we hold in one or two of our portfolios. I can't really comment on the specific stock because, A, because I don't know an awful lot about it, and B, I think it's better for the actual portfolio manager who holds that stock to comment. W e will, after this, we'll put up an email address up, and if the person who wants information on that specific stock emails us, I'll make sure that that's passed across to the appropriate fund manager, and they'll come back to you directly. I think the second question here, s orry, I'm just struggling with my mouse, Piers, o r your mouse, in fact.
Here we go. Our annual report says that we had 160 full-time employees at the end of 2024, and the question is, how many of them are working in sales. The reason for asking is the growth in funds under management is going to be a key driver of future performance, which we obviously agree with. I just happen to know that number off the top of my head. We have 18 people working in sales, and we have 14 people working in the marketing team, and a lot of our distribution effort is actually put through our marketing, both through social media and so on. A ll of those people are really focused on the distribution side.
There's a supplementary question from the same person. We've referenced our Dublin ICVC as helping to meet offshore demand. Are you spreading yourselves too thin in trying to service clients outside of the U.K. as well as in your home market? That's a good question. I mean, that's a good question. I think. You know, we're quite targeted actually in terms of where we've been marketing our ICVC, so it's just been in Ireland, in the Channel Islands, and in South Africa. We're very conscious that we don't want to spread ourselves too thinly a nd, obviously, if we're successful in harnessing demand for those funds, then that will allow us further revenues to support our distribution efforts.
We also have a number of clients in the U.K., for example, wealth managers who manage money for both on and offshore clients. Those individuals often need a similar fund for on and offshore clients. We are also able to sell offshore funds, so our Dublin fund range back into the U.K. for clients who are actually having their money managed offshore. I don't think at this stage we are spreading ourselves too thinly. We have a question around mergers and acquisitions. Basically the question is, you know, how many businesses in the sort of 100 to 1 billion funds under management players are there in the U.K.? I don't have an exact number, but we do see.
I think, you know, since the Tellworth acquisition, we've had quite a bit of incoming from people who've seen that work successfully, who are perhaps running assets in that space, and who are interested in seeing what they might be able to do, if they were part of our team. W e will continue to follow those through. A s I'm sure you're aware, in M&A, you have to look at a lot of things before you find something that you want to focus on. We are quite active and I would also add that we're not necessarily restricted just in that sort of 100 to 1 billion space. We're very comfortable, I think, to look at larger M&A or combinations where they would make sense.
I think, you know, we have had a number of conversations in that regard, and we continue to focus, you know, not just on businesses that are smaller than us, but businesses that are around about the same size or even bigger, where we think, you know, our management team can come in and really make a difference and solve some of those issues that the sector has faced over the last few years. Then there's a question on buying back shares, Piers. Did you want to take that one?
Yes. Yeah. I mean, I think obviously capital management's on the agenda with the Board at all meetings. I mean, I think obviously share buybacks is one option. Obviously, when you go through volatile times, clearly the dividend is an area of focus as well. Should you be paying a dividend that is, you know, close to being uncovered, then obviously having surplus cash is an ability to perhaps carry on with that dividend payment over the cycle should the Board deem that appropriate. I think if you look at the capital side of the business, as I mentioned earlier, we had about GBP 12.8 million of regulatory capital surplus, and that's very much akin to the liquid asset surplus requirement that you need as well.
You are required to hold liquid assets, which is effectively cash on balance sheet. It is appropriate to hold a surplus there should be more volatile times. I think, you know, having a buffer is really important when you are going through sort of market volatilities as well. It not only means that we're here and can weather the storm, but also I think for people maybe wanting to join Premier Miton see us as a stable long-term group here for the future.
Yeah. No, I would agree with that, Piers. I think, you know, the other point we shouldn't lose sight of is that, you know, where there are M&A opportunities, you know, having that sort of cash on the balance sheet is valuable. I think, you know, we have to balance all of those things when we look at the, you know, our capital allocation process.
It gives us optionality.
Exactly. There's a question from Matt saying, you know, "What size would bolt-on M&A be? What size AUM and new investment areas or funds with synergies?" I think, you know, I mean, it's a good question. We're happy to look at M&A, you know, really across the board. I don't think, you know, there are levels at which it's just too small for us to look at but, y ou know, anything from sort of GBP 400 million-GBP 500 million upwards, we will look at. If it's teams, you know, for larger scale M&A, we're quite happy to look at businesses the same size or bigger than us, if it's appropriate to do so. W e looked at a business last autumn.
We actually didn't proceed with it because we were worried about the stability of the assets, but it was, you know, bigger than the Tellworth-type transaction. We're quite active. W e have really strong contacts across the investment banking world, so we do see a lot of things. We don't do them all but we do see a lot. I think, you know, for us, when we look at M&A, we really have sort of three key things that we're looking at. W ill it bring us scale for existing strategies that we run? Will it bring us new product, new strategies that will be of interest to our clients o r will it bring us new clients that we perhaps don't already sell to?
I think when you look back at Tellworth, it really ticks a couple of those boxes because it gave us new strategies that we thought would be of interest to our clients with the long-short absolute return strategies. They also were reasonably active in the sort of family office space and in the hedge fund world. That gave us a new set of clients that we could go and try and sell product to. I think that has been responsible for some of the growth in assets under management within Tellworth, just being able to capitalize on those opportunities as we provided a more stable base for that business to operate within. Then, we have a question from Bruce about corporate M&A remaining a theme across the sector.
Do you get a sense that teams are more attainable as opposed to waiting for corporate transactions than they were 12 months ago, particularly having seen the success of Tellworth? I would say that's right. Yeah. I mean, we are getting sort of incoming from people who perhaps have tried to go out on their own or have set up a business and have seen, you know, the difficult environment that we've been through and are interested in perhaps bringing their business into a more stable environment so that we can put our, you know, operational infrastructure around them. We can put our distribution capability alongside them, and as we have done with Tellworth, and hopefully drive assets under management for those teams.
We have a question from Stuart, which is an absolutely brilliant question. How do we measure the return on investment on marketing and efforts in asset management, and what are the plans to grow brand awareness internationally? We get quite a few questions on this from our non-executive directors.
Yes.
It's quite a difficult question to answer. I mean, clearly we can track things like brand awareness, name awareness. We can, you know, track click-throughs, and so on. We get that sort of data from the marketing team, so we can see. It's actually quite difficult to, you know, link, say, you know, a piece of new business that comes into, you know, say our U.K. Opportunities Fund back to an advert that we've run or whatever. It tends to be a sort of cumulative impact, I think. W E build brand awareness. W e hold perhaps a seminar where advisors and wealth managers come along to hear two or three of our fund managers speak.
T hey then latch on to, I don't know, the guy who runs our U.K. opportunities strategy, for example, and they want more information. They want maybe a one-on-one with him, and then that leads to flow. I don't think it's not like we can put an advert in and then say, "Yes, we've got money in." I think it all really helps in terms of building the brand, building the name awareness, and building a sense with wealth managers and advisors that we are a firm that they could and should be doing business with.
I think the success of our investment conference, you know, we had 200 wealth advisors, wealth managers, and advisors along at the end of February, you know, for a whole day, and we got absolutely fantastic feedback on that, you know, during the sort of, you know, feedback sessions afterwards. I think, you know, that again is another part of our marketing. It's quite an expensive day to put on, but I think, you know, it all helps to build the Premier Miton brand, and the sense that we are a business that, you know, can do good things for advisors and wealth managers' clients. I think that's pretty much all the questions, Piers, isn't it, that we've got on the screen?
Absolutely, guys. If I may just jump back in there. Thank you very much indeed for being so generous with your time then addressing all of those questions that came in from investors today and, o f course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. Mike, perhaps before now, just really looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that'd be great.
Thank you everyone for attending. W e have to be optimistic running an asset management business and I think as we look forward from here, we're getting a definite sense that the backdrop is improving. I really hope that we see that continue to develop over the course of the summer, and so when we come back to update you at the year end, we can report on a more positive environment. But I'd like to thank you all for your support. Thank you for your time today and look forward to keeping you updated.
Perfect, Mike, Piers. That's great, and thank you once again for updating investors this afternoon. Could I please ask investors not to close this session, as you'll now be automatically redirected, for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete but I'm sure it'll be greatly valued by the company. On behalf of the management team of Premier Miton Group plc, we would like to thank you for attending today's presentation. That now concludes today's session so good afternoon to you all.