The Zurich group justifies most of the capital outflows by “negative market movements” and currency effects. Sally Orton is appointed chief financial officer. The stock closes higher.
As expected, asset manager GAM ended the first half of 2022 in bright red. The group justifies most of the capital outflows by “negative market movements” and currency effects. In the process, he appointed a new financial director with immediate effect.
The assets under management contracted by 16.7% compared to the closing of 2021 to 83.2 billion francs. Net reflux now amounts to 1.1 billion in the Investment management division and 2.5 billion in Fund management services, said GAM on Wednesday in a press release.
Commission income deteriorated by more than a quarter year-on-year to CHF 93.5 million. Despite a 9% planing in operating expenses, reduced to 109.5 million, pre-tax profit slipped into the red of 15.4 million, against a gain of 0.8 million a year earlier. The related margin was -17.1%, after 3.6% in the first half of 2021.
Net loss was 275.2 million, after a negative result of 2.7 million a year earlier, mainly due to an IFRS accounting effect attributed to the acquisition of GAM by Julius Baer in 2005.
“Extraordinary” market conditions
The group’s half-year performance was “resilient considering the extraordinary economic and geopolitical conditions” during the period under review, GAM Investments chief executive Peter Sanderson said in the statement. For the rest of the operations, management says it expects the markets to remain volatile and customers cautious, without further details.
Over the current financial year as a whole, operating expenses should be around 20 million francs lower than those recorded in 2021. The group anticipates further cost reductions of at least 20 million in 2023, at favoring the acceleration of measures to improve efficiency.
Given the current conditions, GAM considers achieving its financial targets to be a major challenge and expects to provide an update in light of market developments by the end of the year. To date, the company is aiming for a pre-tax profit of 100 million francs with a corresponding margin of 30%.
In the process, GAM announced in a separate press release the confirmation with immediate effect of Sally Orton as Chief Financial Officer, a function that the latter had already exercised on an interim basis since last May following the decision of the incumbent Richard McNamara to leave the company. company towards the end of the year.
The new member of the group’s chief executive has over a quarter of a century’s experience in the financial sector, including more than 15 years in auditing with KPMG, PwC and EY, where she specialized in auditing and consulting, particularly for banking establishments.
The registered GAM ended the session up 1.2% at 1.04 francs, in an SPI up 0.62%.