In H1 (rep’d 19/5), the main earnings surprise came from declining non-core income. Core income grew but was depressed on challenging markets. We feel that this is a short-term impact of strategic transition and market volatility. We reduce our FY16e PBT forecast by 10% to reflect the mix of lower margin intermediary flows. Front office recruitment should drive direct flows in due course. We retain our valuation approach, a 10% discount to BRK/RAT applied to FY17e earnings, arriving at a 270p 12 ....
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Feeling impact of change, no help from market
- Published:
27 May 2016 -
Author:
Andrew Watson -
Pages:
8
In H1 (rep’d 19/5), the main earnings surprise came from declining non-core income. Core income grew but was depressed on challenging markets. We feel that this is a short-term impact of strategic transition and market volatility. We reduce our FY16e PBT forecast by 10% to reflect the mix of lower margin intermediary flows. Front office recruitment should drive direct flows in due course. We retain our valuation approach, a 10% discount to BRK/RAT applied to FY17e earnings, arriving at a 270p 12 ....