TIDMN91
RNS Number : 4420T
Ninety One PLC
15 November 2023
Ninety One plc Ninety One Limited
Incorporated in England and Wales Incorporated in the Republic of South
Registration number 12245293 Africa
Date of registration: 4 October 2019 Registration number 2019/526481/06
LSE share code: N91 Date of registration: 18 October
JSE share code: N91 2019
ISIN: GB00BJHPLV88 JSE share code: NY1
ISIN: ZAE000282356
Interim results for the six months to 30 September 2023
15 November 2023
Highlights
-- Challenging market and business conditions.
-- Closing assets under management decreased by 5% in the six months, to GBP123.1 billion.
-- Net outflows of GBP4.3 billion .
-- Basic earnings per share decreased by 5% to 8.9 pence and
adjusted earnings per share decreased by 9% to 8.2 pence.
-- Adjusted operating profit margin unchanged at 32.6%.
-- Interim dividend of 5.9 pence per share.
-- Competitive long-term investment performance.
-- Staff shareholding increased to 29.4%.
30 September 30 September 31 March
GBP billion 2023 2022 2023
-------------------------------------- -------------------------- ------------- --------
Assets under management 123.1 132.3 129.3
Net flows (4.3) (3.2) (10.6)
Average assets under management 125.3 138.2 134.9
-------------------------------------- -------------------------- ------------- --------
Six months to 30 September Six months to
2023 30 September Change
Key financials(1) 2022 %
-------------------------------------- -------------------------- ------------- --------
Profit before tax (GBP'm) 104.0 110.6 (6)
Adjusted operating profit (GBP'm) 97.9 107.9 (9)
Adjusted operating profit margin 32.6% 32.6%
Basic earnings per share (p) 8.9 9.4 (5)
Basic headline earnings per share (p) 8.9 9.4 (5)
Adjusted earnings per share (p) 8.2 9.0 (9)
Interim dividend per share (p) 5.9 6.5 (9)
-------------------------------------- -------------------------- ------------- --------
Note: (1) Please refer to explanations and definitions on pages
12-14.
Hendrik du Toit, Founder and Chief Executive Officer,
commented:
"Rising interest rates and increased geopolitical uncertainty
have contributed to continued investor caution. Equity markets have
been driven by narrow sectoral and geographic performance. These
factors have dampened investor appetite for emerging markets and
public equities in general. We expect these conditions to remain
for the rest of the financial year.
"Our response is to intensify our efforts in areas in which we
can compete for market leadership, delivering best-in-class service
to our clients and applying strict cost discipline, while
maintaining our long-term growth mindset. In times like these the
owner culture we have nurtured over many years becomes a critical
success factor. The people of Ninety One have the team spirit,
skill and self belief to prevail in the face of hostile business
conditions. In spite of the well-known structural challenges faced
by the active investment management industry, the dominant
headwinds are cyclical in nature. We are confident in our ability
to regain our growth momentum."
For further information please contact:
Investor relations
Alvar Fernandez alvar.fernandez@ninetyone.com
+44 (0) 20 3938 2305
Jakub Vojtek jakub.vojtek@ninetyone.com
+44 (0) 20 3938 2413
Media
Media enquiries
Jeannie Dumas (for UK) jeannie.dumas@ninetyone.com +44 (0) 793 170 7108
Kotie Basson (for South Africa) kotie.basson@ninetyone.com +27
(0) 82 375 1317
Investor presentation
A presentation to investors and financial analysts will be held
at our London office (55 Gresham Street, EC2V 7EL) at 9.00 am (UK
time) on 15 November 2023. There will be a live webcast available
for those unable to attend. The webcast registration link is
available at https://ninetyone.com/interim-results-webinar .
A copy of the presentation will be made available on the
Company's website at
https://ninetyone.com/interim-results-presentation at 8.00 am (UK
time) .
Forward-looking statements
This announcement does not constitute or form part of any offer,
advice, recommendation, invitation or inducement to any person to
underwrite, subscribe for or otherwise acquire or dispose of
securities in Ninety One plc and its subsidiaries or Ninety One
Limited and its subsidiaries (together, "Ninety One"), nor should
it be construed as legal, tax, financial, investment or accounting
advice.
This announcement may include statements, beliefs or opinions
that are, or may be deemed to be, "forward-looking statements".
These forward-looking statements may be identified by the use of
forward-looking terminology, including the terms "believes",
"estimates", "plans", "projects", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions. No
representation or warranty is made that any of these statements or
forecasts will come to pass or that any forecast results will be
achieved. Forward-looking statements may and often do differ
materially from actual results. Any forward-looking statements
contained in the announcement speak only as of their respective
dates, reflect Ninety One's current view with respect to future
events and are subject to risks relating to future events and other
risks, uncertainties and assumptions relating to Ninety One's
business, results of operations, financial position, liquidity,
prospects, growth and strategies.
Except as required by any applicable law or regulation, Ninety
One expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained in this announcement or any other forward-looking
statements it may make whether as a result of new information,
future developments or otherwise.
About Ninety One
Ninety One is an independent investment manager, founded in
South Africa in 1991, which operates and invests globally.
Ninety One is listed on the London and Johannesburg Stock
Exchanges.
CHIEF EXECUTIVE OFFICER'S REVIEW
The operating conditions during the first half of the 2024
financial year continued to be extremely challenging. The caution
we signalled at the beginning of this reporting period was
justified. The impact of sharply rising long-term interest rates
and geopolitical risks have continued to dampen investor risk
appetite. On the surface, equity markets rose, but the rally was
extremely narrow and largely restricted to a small number of large
US technology companies.
Ninety One is a "risk-on" business operating in what we have
described as a "risk-off" environment. Ours is a predominantly
long-only business, inherently exposed to the price volatility of
the financial assets in which we invest client capital. This
exposure adds significant shareholder value over time but is
currently not supportive of value creation. We know that successful
investing is about taking sensible risks over the long term to
generate excess returns. This is what we aim to do for our clients,
even if near-term conditions are not supportive of price levels for
risk assets. Since our inception in 1991, we have dealt with these
inevitable periods of adverse market conditions by applying our
well-tested investment processes, concentrating on our clients and
their requirements, and ensuring that our people are focused on the
task at hand and are equipped with the necessary resources to do
so.
Our response to the current headwinds is not to change course,
but to focus on our chosen areas of expertise and continue to seek
market-leading positions which could be scaled up in the years to
come. We continue to deepen our relationships within our target
segments. In our chosen markets we build long-term relationships
with leading asset owners and asset platforms. Our South African
business continues to do well. In this market we offer a broader
set of strategies than in the rest of the world to support our
market leadership. Our efforts in North America, the largest
savings market in the world, will pay off once risk appetite
returns.
Our business model remains people centric, capital light and
technology enabled. Through the cycle we continue to build our
intergenerational talent pipeline, maintain capital discipline and
invest in supporting technology and the digitalisation of our
business. Stability and our owner-culture are key foundations for
Ninety One and we have no intention of undermining them because of
temporary headwinds. Our people now own over 29% of the equity in
Ninety One, which is an indication of our long-term orientation and
appropriate alignment of interests with our stakeholders. As
always, we are mindful of our cost line and the need for cost
discipline through the cycle.
In line with our stated purpose of investing for a better
tomorrow, through building a better firm, striving to invest better
and actively contributing to a better world, our sustainability
efforts continue unabated. Ninety One intends to play its part in
the financing of the transition to a more sustainable global
economy. We are working hard to grow our portfolio of sustainable
strategies to give our clients exposure to the winning companies of
tomorrow and to benefit from the growing opportunities offered by
the energy transition alongside the dynamism of emerging
markets.
Outlook
At the end of the previous financial year, we signalled caution
about the near term. Our working assumption is that we will be
operating in challenging markets for some time to come.
We continue to build our business for the long term, while
applying appropriate cost discipline. Ninety One is a resilient
business with a long track record of operating in different market
conditions. We see ample long-term growth opportunities ahead in
spite of current market conditions and the rapidly changing world
in which we operate. These growth opportunities depend on our
ability to deliver for our clients in a highly competitive
industry.
We intend to navigate the current turbulence with confidence.
This is not a time for distractions. Our attention is firmly on
execution. Now, more than ever, we will focus on the investment
task at hand and do our best to meet the needs of our clients.
OPERATING REVIEW
Assets under management ("AUM")
Closing AUM decreased by 5% to GBP123.1 billion (31 March 2023:
GBP129.3 billion), reflecting net outflows and negative markets.
The market and foreign exchange impact in the first half was
negative GBP1.9 billion (H1 2023: negative GBP8.4 billion).
AUM by asset class
GBP million 30 September 31 March 2023 Change %
2023
----------------------------- ------------- -------------- ---------
Equities 56,226 59,782 (6)
Fixed Income 31,943 32,976 (3)
Multi-asset 20,916 22,605 (7)
Alternatives 4,158 3,990 4
South African Fund Platform 9,878 9,913 (0)
----------------------------- ------------- -------------- ---------
Total 123,121 129,266 (5)
----------------------------- ------------- -------------- ---------
AUM decreased across most asset classes, in line with the prior
period.
AUM by Client Group
GBP million 30 September 31 March 2023 Change %
2023
----------------- ------------- -------------- ---------
United Kingdom 23,007 24,890 (8)
Africa 49,912 51,418 (3)
Europe 14,812 15,480 (4)
Americas 15,807 16,846 (6)
Asia Pacific(1) 19,583 20,632 (5)
----------------- ------------- -------------- ---------
Total 123,121 129,266 (5)
----------------- ------------- -------------- ---------
Note: (1) Asia Pacific includes Middle East.
Overall, AUM remains well-diversified by client geography
("Client Groups") and split broadly in line with the prior period.
AUM reduced across all regions, reflecting negative market
movements as well as net outflows in most regions .
AUM by client type
GBP million 30 September 31 March 2023 Change %
2023
--------------- ------------- -------------- ---------
Advisor 44,494 46,466 (4)
Institutional 78,627 82,800 (5)
--------------- ------------- -------------- ---------
Total 123,121 129,266 (5)
--------------- ------------- -------------- ---------
AUM across both the advisor and institutional channels reduced
in the first half, reflecting the impact of negative market
movements and negative net flows. The AUM split between channels
remains unchanged from the prior period .
Net flows
In the first half, we experienced net outflows of GBP4.3 billion
(H1 2023: net outflows of GBP3.2 billion). This was driven by
limited appetite for risk-on strategies.
Net flows by asset class
Six months to Six months to
GBP million 30 September 2023 30 September 2022
----------------------------- ------------------- -------------------
Equities (3,041) (2,229)
Fixed Income (928) (346)
Multi-asset (462) (825)
Alternatives 87 5
South African Fund Platform 93 192
----------------------------- ------------------- -------------------
Total (4,251) (3,203)
----------------------------- ------------------- -------------------
There were net inflows into the South African Fund Platform and
Alternatives reflecting healthy demand. These were outweighed by
net outflows across the remaining asset classes due to lower demand
for risk-on strategies. The largest contributor to net outflows,
Equities, was driven by global and UK strategies, which outweighed
net inflows into emerging markets, South African and sustainable
equity strategies. The net outflows in Fixed Income were primarily
from local currency emerging market sovereign strategies.
Multi-asset net outflows were driven by income and South African
strategies.
Net flows by Client Group
Six months to Six months to
GBP million 30 September 2023 30 September 2022
----------------- ------------------- -------------------
United Kingdom (1,675) (369)
Africa 158 27
Europe (533) (111)
Americas (1,137) (827)
Asia Pacific(1) (1,064) (1,923)
----------------- ------------------- -------------------
Total (4,251) (3,203)
----------------- ------------------- -------------------
Note: (1) Asia Pacific includes Middle East.
Net inflows into the Africa Client Group were outweighed by net
outflows from the other Client Groups, particularly the UK,
Americas and Asia Pacific where reduced demand for risk-on
strategies was most notable. UK net outflows were largely from
global and UK equity strategies, as well as emerging market fixed
income strategies. Americas net outflows were driven by our Latin
American equity strategies, as well as emerging market sovereign
debt and global equity strategies. Asia Pacific net outflows were
largely from global equities.
Net flows by client type
Six months to Six months to
GBP million 30 September 2023 30 September 2022
--------------- ------------------- -------------------
Advisor (864) 149
Institutional (3,387) (3,352)
Total (4,251) (3,203)
--------------- ------------------- -------------------
The Institutional channel drove the majority of net outflows,
driven by reduced demand for equities and emerging market fixed
income from the Americas, Asia Pacific and UK Client Groups. In the
Advisor channel, there were net inflows into our emerging market
fixed income strategies, but these were insufficient to offset the
net outflows in equities, particularly from the UK Client
Group.
Investment performance
Firm-wide investment performance(1)
During the first half of financial year 2024, our short-term
firm-wide investment performance deteriorated compared to the
levels reported at the end of financial year 2023. As at 30
September 2023, our one-year outperformance stood at 50% (31 March
2023: 57%). Our medium- and long-term firm-wide investment
outperformance also declined, but remains competitive at 52%, 71%
and 80% over three, five and ten years respectively (31 March 2023:
71%, 76% and 81% respectively).
1 Year 3 Year 5 Year 10 Year Since inception
Outperformance 50% 52% 71% 80% 68%
Underperformance 50% 48% 29% 20% 32%
================= ====== ====== ====== ======= ===============
Note: (1) Firm-wide outperformance is calculated as the sum of
the total market values for individual portfolios that have
positive active returns on a gross basis expressed as a percentage
of total AUM. Our percentage of firm outperformance is reported on
the basis of current AUM and therefore does not include terminated
funds. Total AUM excludes double-counting of pooled products and
third party assets administered on our South African Fund Platform.
Benchmarks used for the above analysis include cash, peer group
averages, inflation and market indices as specified in client
mandates or fund prospectuses. For all periods shown, market values
are as at 30 September 2023.
Mutual fund investment performance(1)
During the first half of financial year 2024, Ninety One's
mutual fund investment performance on a one-year basis moderated
compared to the exceptional levels seen at the end of financial
year 2023. As at 30 September 2023, 49% of our mutual fund client
base experienced first or second quartile performance (31 March
2023: 72%). Mutual fund performance on a three- and five-year basis
improved, with 54% and 82% in the first or second quartile
respectively (31 March 2023: 39% and 76% respectively). Over ten
years, 90% of our mutual funds were in the top half of their
categories (31 March 2023: 67%). This confirms our ability to
generate competitive investment returns for our clients over the
medium to long term.
1 Year 3 Year 5 Year 10 Year
First quartile 31% 27% 31% 51%
Second quartile 18% 27% 51% 39%
Third quartile 28% 34% 14% 5%
Fourth quartile 23% 13% 4% 4%
================ ====== ====== ====== =======
Note: (1) Mutual fund performance and ranking as per Morningstar
data using primary share classes, net of fees to 30 September 2023.
Peer group universes are either Investment Association, Morningstar
Categories or ASISA sectors as classified by Morningstar. Cash or
cash-equivalent funds are excluded from the table. Mutual fund
performance weighted by AUM. Percentages may not add up to 100% due
to rounding.
FINANCIAL REVIEW
Financial results (1)
Six months to Six months to
30 September 30 September Year ended
GBP billion 2023 2022 31 March 2023
-------------------------------------- ------------- ------------- --------------
Closing AUM 123.1 132.3 129.3
Net flows (4.3) (3.2) (10.6)
Average AUM 125.3 138.2 134.9
-------------------------------------- ------------- ------------- --------------
Six months to Six months to
30 September 30 September
GBP million (unless stated otherwise) 2023 2022 Change %
-------------------------------------- ------------- ------------- --------------
Management fees 282.2 312.8 (10)
Performance fees 12.1 11.0 10
-------------------------------------- ------------- ------------- --------------
Net revenue 294.3 323.8 (9)
Share of profit from associates 0.8 0.5 60
Other income 4.5 6.6 (32)
-------------------------------------- ------------- ------------- --------------
Adjusted operating revenue 299.6 330.9 (9)
-------------------------------------- ------------- ------------- --------------
Adjusted operating expenses (201.7) (223.0) (10)
-------------------------------------- ------------- ------------- --------------
Adjusted operating profit 97.9 107.9 (9)
-------------------------------------- ------------- ------------- --------------
Adjusted net interest income 8.3 2.7 n.m.
Share scheme net expense (2.2) - n.m.
-------------------------------------- ------------- ------------- --------------
Profit before tax 104.0 110.6 (6)
-------------------------------------- ------------- ------------- --------------
Tax expense (24.7) (25.9) (5)
-------------------------------------- ------------- ------------- --------------
Profit after tax 79.3 84.7 (6)
-------------------------------------- ------------- ------------- --------------
Average fee rate (basis points,
"bps") 45.0 45.2
Adjusted operating profit margin 32.6% 32.6%
Total full-time employees 1,180 1,216 (3)
-------------------------------------- ------------- ------------- --------------
Note: (1) Please refer to explanations and definitions on pages
12-14.
The commentary covers non-IFRS measures to reflect the manner in
which management monitors and assesses the financial performance of
Ninety One. Reconciliations to IFRS equivalent measures are
provided in the alternative performance measures section. Movements
discussed as part of the commentary below apply equally to the
movements in equivalent IFRS measures. Adjusted operating profit
decreased 9% to GBP97.9 million (H1 2023: GBP107.9 million). The
adjusted operating profit margin remained flat at 32.6% (H1 2023:
32.6%). Profit before tax decreased 6% to GBP104.0 million (H1
2023: GBP110.6 million).
Assets under management
Closing AUM decreased by 5% to GBP123.1 billion (31 March 2023:
GBP129.3 billion), reflecting net outflows of GBP4.3 billion (H1
2023: net outflows of GBP3.2 billion) and negative market and
foreign exchange movements of GBP1.9 billion (H1 2023: negative
GBP8.4 billion). Average AUM decreased 9% to GBP125.3 billion (H1
2023: GBP138.2 billion).
Adjusted operating revenue
Management fees decreased 10% to GBP282.2 million (H1 2023:
GBP312.8 million), against a 9% decrease in average AUM. The
average management fee rate was 0.2 bps lower at 45.0 bps compared
with H1 2023 (45.2 bps) but in line with FY 2023 (45.0 bps).
Performance fees were 10% higher at GBP12.1 million (H1 2023:
GBP11.0 million). Share of profit from associates increased to
GBP0.8 million (H1 2023: GBP0.5 million). Other income of GBP4.5
million (H1 2023: GBP6.6 million) consists of operating interest
and gains or losses on foreign exchange and investments.
Adjusted operating expenses
Adjusted operating expenses decreased by 10% to GBP201.7 million
(H1 2023: GBP223.0 million), driven by decreases in both employee
remuneration and business expenses.
Employee remuneration
Ninety One is a people business and employee remuneration
represented 65% (H1 2023: 66%) of the total expense base. Overall,
employee remuneration decreased by 12% to GBP130.3 million (H1
2023: GBP147.3 million). This was driven mostly by a decrease in
variable remuneration in line with decreased adjusted operating
profit. Average headcount over the period decreased by 1% to 1,189
(H1 2023: 1,198). Over 50% of employee remuneration is variable and
the resulting compensation ratio was 43.5% (H1 2023: 44.5%).
Business expenses
Business expenses decreased by 6% to GBP71.4 million (H1 2023:
GBP75.7 million) driven by the impact of the weaker US dollar and
South African rand against pound sterling, offset in part by higher
inflation. The period-on-period split of business expenses remained
relatively unchanged and the largest expense item remained client
and retail fund administration.
Adjusted net interest income
Adjusted net interest income increased to GBP8.3 million (H1
2023: GBP2.7 million) in line with recent increases in interest
rates. Adjusted net interest income excludes interest expense on
lease liabilities of GBP1.9 million (H1 2023: GBP1.8 million),
which has been included in adjusted operating expenses.
Share scheme net expense
The share scheme net expense or credit arises when employees opt
to invest a portion of their deferred bonuses into the Ninety One
share scheme. Under IFRS2, such allocations are amortised over the
vesting period. To reflect the adjusted operating expenses as
though all awards were fully expensed during the year in which they
were awarded, the gross allocation value less amortisation charges
("share scheme net expense/credit") is excluded from adjusted
operating expenses. The net expense of GBP2.2 million largely
reflects an expected decrease in deferred bonuses awarded as
shares, linked to lower variable remuneration as noted above.
Profit before tax
Profit before tax decreased 6% to GBP104.0 million compared to
the prior period (H1 2023: GBP110.6 million). Adjusted operating
profit decreased 9% to GBP97.9 million (H1 2023: GBP107.9 million)
and is more reflective of Ninety One's operating performance.
Effective tax rate
The effective tax rate for the six months to 30 September 2023
was 23.8% (H1 2023: 23.4%), against a headline UK corporation tax
rate of 25.0% (H1 2023: 19.0%) and a headline South Africa
corporation tax rate of 27.0% (H1 2023: 27.0%). The increase in the
UK corporation tax rate was the main reason for the increase in the
effective tax rate.
Earnings per share
Six months to Six months to
30 September 30 September Change
GBP million (unless stated otherwise) 2023 2022 %
-------------------------------------- ------------- ------------- ------
Profit after tax 79.3 84.7 (6)
Adjusted net interest income(1) (8.3) (2.7) n.m.
Share scheme net expense(1) 2.2 - n.m.
Tax on adjusting items(1) 1.6 0.7 n.m.
-------------------------------------- ------------- ------------- ------
Adjusted earnings attributable to
ordinary shareholders 74.8 82.7 (10)
-------------------------------------- ------------- ------------- ------
Weighted average number of ordinary
shares (m) - basic 895.5 900.0 (1)
Weighted average number of ordinary
shares (m) - diluted 895.5 901.7 (1)
Number of ordinary shares (m) 911.5 922.7 (1)
Earnings per share (p)
- Basic 8.9 9.4 (5)
- Diluted 8.9 9.4 (5)
Headline earnings per share (p)
- Basic 8.9 9.4 (5)
- Diluted 8.9 9.4 (5)
Adjusted earnings per share (p) 8.2 9.0 (9)
-------------------------------------- ------------- ------------- ------
Note: (1) This comprises a component of "non-operating items"
per adjusted earnings per share definition on page 14.
Basic earnings per share ("Basic EPS"), diluted earnings per
share, basic headline earnings per share and diluted headline
earnings per share decreased by 5% to 8.9p (H1 2023: 9.4p).
Adjusted earnings per share ("Adjusted EPS") decreased in line with
adjusted operating profit by 9% to 8.2p (H1 2023: 9.0p), which is
more reflective of the core operating performance of Ninety
One.
The number of shares in issue decreased to 911.5 million (H1
2023: 922.7 million) following share buybacks during the current
period. The investment in own shares held by Ninety One as part of
the Ninety One share scheme results in the relatively small
difference in the number of shares used to calculate Basic EPS and
Adjusted EPS.
Summary balance sheet
30 September 2023
----------------------------------------------- ------------- ----------------- ------------
GBP million Policyholders Shareholders Total IFRS
----------------------------------------------- ------------- ----------------- ------------
Non-current assets - 170.1 170.1
Current assets
Linked investments backing policyholder funds 9,724.8 - 9,724.8
Cash and cash equivalents - 319.5 319.5
Other current assets 67.8 192.5 260.3
Total current assets 9,792.6 512.0 10,304.6
----------------------------------------------- ------------- ----------------- ------------
Total assets 9,792.6 682.1 10,474.7
----------------------------------------------- ------------- ----------------- ------------
Non-current liabilities 29.2 123.5 152.7
Current liabilities
Policyholder investment contract liabilities 9,709.6 - 9,709.6
Other current liabilities 53.8 220.8 274.6
----------------------------------------------- ------------- ----------------- ------------
Total current liabilities 9,763.4 220.8 9,984.2
----------------------------------------------- ------------- ----------------- ------------
Total liabilities 9,792.6 344.3 10,136.9
----------------------------------------------- ------------- ----------------- ------------
Equity - 337.8 337.8
----------------------------------------------- ------------- ----------------- ------------
Total equity and liabilities 9,792.6 682.1 10,474.7
----------------------------------------------- ------------- ----------------- ----------
31 March 2023
----------------------------------------- ------------- ------------- ----------
GBP million Policyholders Shareholders Total IFRS
----------------------------------------- ------------- ------------- ----------
Non-current assets - 176.0 176.0
Current assets
Linked investments backing policyholder
funds 9,962.6 - 9,962.6
Cash and cash equivalents - 379.6 379.6
Other current assets 65.0 229.2 294.2
Total current assets 10,027.6 608.8 10,636.4
----------------------------------------- ------------- ------------- ----------
Total assets 10,027.6 784.8 10,812.4
----------------------------------------- ------------- ------------- ----------
Non-current liabilities 24.2 126.0 150.2
Current liabilities
Policyholder investment contract
liabilities 9,967.3 - 9,967.3
Other current liabilities 36.1 308.9 345.0
----------------------------------------- ------------- ------------- ----------
Total current liabilities 10,003.4 308.9 10,312.3
----------------------------------------- ------------- ------------- ----------
Total liabilities 10,027.6 434.9 10,462.5
----------------------------------------- ------------- ------------- ----------
Equity - 349.9 349.9
----------------------------------------- ------------- ------------- ----------
Total equity and liabilities 10,027.6 784.8 10,812.4
----------------------------------------- ------------- ------------- ----------
Assets and liabilities
Ninety One undertakes investment-linked insurance business
through one of its South African entities, Ninety One Assurance,
and does not take on any insurance risk in respect of such
business. The policyholders hold units in a pooled portfolio of
assets via linked policies issued by the insurance entity. The
assets are beneficially held by the insurance entity and the assets
are reflected on its statement of financial position. Due to the
nature of a linked policy, Ninety One's liability to the
policyholders is equal to the market value of the assets underlying
the policies, less applicable taxation. The movements in
policyholder assets are largely due to foreign exchange and
markets. The commentary below only covers the shareholders'
numbers.
Total assets decreased to GBP682.1 million (31 March 2023:
GBP784.8 million). Trade and other receivables within other current
assets decreased from GBP195.8 million to GBP162.4 million mainly
due to a decrease in subscription debtors. Cash and cash
equivalents decreased to GBP319.5 million (31 March 2023: GBP379.6
million) following payment of variable compensation in April
2023.
Ninety One has limited seed investments. Seed capital for mutual
funds was GBP3.0 million (31 March 2023: GBP2.9 million) and
co-investments in alternatives totalled GBP11.8 million (31 March
2023: GBP11.0 million).
Total liabilities decreased to GBP344.3 million (31 March 2023:
GBP434.9 million) mainly reflecting that bonus provisions are for a
half year period only. There is no debt financing on the balance
sheet.
Equity decreased to GBP337.8 million (31 March 2023: GBP349.9
million), mainly reflecting the profits for the period, the payment
of the prior year final dividend, and the impact of share capital
movements.
Ninety One has established employee benefit trusts for the
purpose of purchasing shares and satisfying the share-based payment
awards granted to employees. Over the period, 6.9 million shares
were purchased through these trusts and 4.7 million shares were
released to employees. In addition, 0.2 million shares were bought
back by the Ninety One but not yet cancelled at the end of the
reporting period, resulting in a total of 25.0 million shares held
which is 2.7% of Ninety One's 911.5 million total shares in
issue.
Capital and regulatory position(1)
30 September
GBP million 2023 31 March 2023
------------------------------------ ------------ -------------
Equity 337.8 349.9
Non-qualifying assets(2) (37.1) (35.3)
------------------------------------ ------------ -------------
Qualifying capital 300.7 314.6
------------------------------------ ------------ -------------
Dividends declared after period end (53.7) (61.7)
Estimated regulatory requirement (114.8) (115.7)
------------------------------------ ------------ -------------
Estimated capital surplus 132.2 137.2
------------------------------------ ------------ -------------
Notes:
(1) The above table represents the amalgamated position across
Ninety One plc and its subsidiaries and Ninety One Limited and its
subsidiaries, which for regulatory capital purposes are separate
groups. Both groups of companies had an estimated capital surplus
at 30 September and 31 March 2023.
(2) Non-qualifying assets comprise assets that are not available
to meet regulatory requirements.
The estimated regulatory capital requirement is relatively
unchanged at GBP114.8 million (31 March 2023: GBP115.7 million).
Ninety One has an expected capital surplus of GBP132.2 million (31
March 2023: GBP137.2 million), which is consistent with the
commitment to a capital-light balance sheet. This means Ninety One
has a capital coverage of 215% of its capital requirement (31 March
2023: 219%). The capital requirements for all Ninety One companies
are monitored throughout the year .
Dividends
The Board has considered the strength of the balance sheet and
the outlook for the remainder of the year. In line with the stated
dividend policy, the Board has declared an interim dividend of 5.9p
per share after ensuring there is sufficient capital to meet
current or expected changes in regulatory capital requirements and
investment needs, as well as a reasonable buffer to protect against
fluctuations in those requirements. The interim dividend will be
paid on 22 December 2023 to shareholders recorded on the UK and
South African share registers on 8 December 2023.
Liquidity
Ninety One maintains a healthy liquidity position, which
comprises cash and cash equivalents of GBP319.5 million (31 March
2023: GBP379.6 million). Ninety One maintains a consistent
liquidity management model, with liquidity requirements monitored
carefully against its existing and longer-term obligations. To meet
the daily requirements of the business and to mitigate its credit
exposure, Ninety One diversifies its cash and cash equivalents
across a range of suitably credit-rated corporate banks and money
market funds.
Alternative performance measures
Ninety One uses non-IFRS measures to reflect the manner in which
management monitors and assesses the financial performance of
Ninety One.
Items are included or excluded from adjusted operating revenue
and expenses based on management's assessment of whether they
contribute to the core operations of the business. In
particular:
-- share of profit from associates, as well as net gain on
investments and other income, are included in other operating
revenue as, other than movements in investments related to deferred
employee benefit schemes and excluded as noted below, these items
are directly attributable to operations;
-- deferred employee benefit scheme movements are deducted from
adjusted operating revenue and adjusted operating expenses as the
movements offset and do not impact operating performance;
-- subletting income is excluded from adjusted operating revenue
and deducted from adjusted operating expenses as it is a recovery
of costs rather than a core revenue item;
-- the share scheme net expense/credit is excluded from adjusted
operating expenses and employee remuneration so that they reflect
the position as though all awards during the period were fully
expensed in the same period; and
-- interest expense on lease liabilities is included in adjusted
operating expenses to reflect the operating costs of offices.
These non-IFRS measures are considered additional disclosures
and in no case are intended to replace the financial information
prepared in accordance with the basis of preparation detailed in
the condensed consolidated financial statements. Moreover, the way
in which Ninety One defines and calculates these measures may
differ from the way in which these or similar measures are
calculated by other entities. Accordingly, they may not be
comparable to measures used by other entities in Ninety One's
industry.
These non-IFRS measures are considered to be pro forma financial
information for the purpose of the JSE Listings Requirements and
are the responsibility of Ninety One's Board. Due to their nature,
they may not fairly present the issuer's financial position,
changes in equity, results of operations or cash flows. The
non-IFRS financial information has been prepared with reference to
JSE Guidance Letter: Presentation of pro forma financial
information dated 4 March 2010 and in accordance with paragraphs
8.15 to 8.33 in the JSE Listings Requirements, the Revised SAICA
Guide on Pro forma Financial Information (issued September 2014).
The pro forma financial information has not been reviewed or
reported on by Ninety One's external auditors.
These non-IFRS measures, including reconciliations to their
nearest condensed consolidated financial statements equivalents,
are as follows:
Six months to Six months to
30 September 30 September
GBP million 2023 2022
----------------------------------------- ------------- -------------
Net revenue 294.3 323.8
Share of profit from associates 0.8 0.5
Net gain on investments and other income 4.9 5.4
Adjusted for:
Deferred employee benefit scheme loss 0.2 1.8
Subletting income (0.6) (0.6)
Adjusted operating revenue 299.6 330.9
----------------------------------------- ------------- -------------
Six months to Six months to
30 September 30 September
GBP million 2023 2022
----------------------------------------- ------------- -------------
Operating expenses 202.4 220.0
Adjustments:
Share scheme net expense (2.2) -
Deferred employee benefit scheme loss 0.2 1.8
Subletting income (0.6) (0.6)
Interest expense on lease liabilities 1.9 1.8
Adjusted operating expenses 201.7 223.0
----------------------------------------- ------------- -------------
Six months to Six months to
30 September 30 September
GBP million 2023 2022
----------------------------------------- ------------- -------------
Adjusted operating revenue 299.6 330.9
Adjusted operating expenses (201.7) (223.0)
----------------------------------------- ------------- -------------
Adjusted operating profit 97.9 107.9
----------------------------------------- ------------- -------------
Adjusted operating profit margin 32.6% 32.6%
----------------------------------------- ------------- -------------
Six months to Six months to
30 September 30 September
GBP million 2023 2022
----------------------------------------- ------------- -------------
Net interest income 6.4 0.9
Adjusted for:
Interest expense on lease liabilities 1.9 1.8
Adjusted net interest income 8.3 2.7
----------------------------------------- ------------- -------------
Foreign currency
Ninety One prepares its financial information in British pound
sterling. The results of operations and the financial condition of
Ninety One's individual companies are reported in the local
currencies of the countries in which they are domiciled, including
South African rand and US dollar. These results are then translated
into pound sterling at the applicable foreign currency exchange
rates for inclusion in the condensed consolidated financial
statements. The following table sets out the movement in the
relevant exchange rates against pound sterling for the six month
periods ended 30 September 2022 and 2023, and the year ended 31
March 2023 .
30 September 2023 31 March 2023 30 September 2022
------------------- ------------------- --------------- -------------------
Period Average Period Average Period Average
end end end
------------------- -------- --------- ------ ------- -------- ---------
South African rand 23.09 23.48 22.10 20.46 20.05 19.80
US dollar 1.22 1.26 1.24 1.21 1.11 1.22
------------------- -------- --------- ------ ------- -------- ---------
DEFINITIONS
Adjusted earnings attributable to shareholders: Calculated as
profit after tax adjusted to remove non-operating items
Adjusted earnings per share (Adjusted EPS): Adjusted earnings
attributable to shareholders divided by the number of ordinary
shares in issue at the end of the period
Adjusted net interest income: Calculated as net interest income
or expense adjusted to exclude interest expense on lease
liabilities for office premises
Adjusted operating expenses: Calculated as operating expenses
adjusted to exclude share scheme movements and deferred employee
benefit scheme movements, but adjusted to include subletting income
and interest expense on lease liabilities
Adjusted operating profit: Calculated as adjusted operating
revenue less adjusted operating expenses
Adjusted operating profit margin: Calculated as adjusted
operating profit divided by adjusted operating revenue
Adjusted operating revenue: Calculated as net revenue, adjusted
to include share of profit from associates, net gain on investments
and other income, but adjusted to exclude deferred employee benefit
scheme movements and subletting income
Assets under management (AUM): The aggregate assets managed on
behalf of clients. For some private markets' investments, the
aggregate value of assets managed is based on committed funds by
clients; this is changed to the lower of committed funds and net
asset value, in line with the fee basis. Where cross investment
occurs, assets and flows are identified, and the duplication is
removed
Average AUM: Calculated as the average of opening AUM for the
period, and the month end AUM for each of the subsequent months in
the period
Average exchange rate: Calculated as the average of the daily
closing spot exchange rates in the relevant period
Average fee rate: Management fees divided by average AUM
(annualised for non-twelve month periods), expressed in basis
points
Basic earnings per share (Basic EPS): Profit attributable to
shareholders divided by the weighted average number of ordinary
shares outstanding during the period, excluding own shares held by
Ninety One and Ninety One Employee Benefit Trusts
Compensation ratio: Calculated as employee remuneration divided
by adjusted operating revenue
Diluted earnings per share: Profit for the period attributable
to shareholders divided by the weighted average number of ordinary
shares outstanding during the period, plus the weighted average
number of ordinary shares that would be issued on the conversion of
all the potentially dilutive shares into ordinary shares
Headline earnings per share (HEPS): Ninety One is required to
calculate HEPS in accordance with JSE Listings Requirements,
determined by reference to circular 1/2023 "Headline Earnings"
issued by the South African Institute of Chartered Accountants
JSE: Johannesburg Stock Exchange, the exchange operated by the
JSE Limited, a public company incorporated and registered in South
Africa, under the Financial Markets Act
LSE: London Stock Exchange, the securities exchange operated by
the London Stock Exchange plc under the Financial Services and
Markets Act 2000, as amended
Management fees: Recurring fees net of commission expense
Net flows: The increase in AUM received from clients, less the
decrease in AUM withdrawn by clients, during a given period. Where
cross investment occurs, assets and flows are identified, and the
duplication is removed
Net revenue: Represents revenue in accordance with IFRS, less
commission expense
Non-operating items: Include adjusted net interest income, share
scheme movements, and tax on adjusting items
PRINCIPAL RISKS AND UNCERTAINTIES
Ninety One faces a number of risks in the normal course of
business. The Board has the ultimate responsibility for risk
management. It approves Ninety One's risk appetite and general risk
management framework and monitors the operation of the
framework.
The risk management framework is utilised across all categories
of risk within Ninety One and employs tools including risk
assessments, key indicators, stress and scenario tests and
learnings from internal and external events. This informs business
decisions, helps direct resources and helps to ensure Ninety One is
appropriately capitalised.
There have been no significant changes to Ninety One's risk
management approach in the period. The principal risks faced by
Ninety One remain unchanged since the year end and continue to be
the principal risks for the second half of the financial year.
These comprise business and strategic risks, investments risks and
operational risks. A detailed description of each, including an
overview of the risk management and mitigation approach, is
disclosed on pages 57 to 63 of the Integrated Annual Report 2023,
which can be accessed via the Investor Relations home page on the
website at www.ninetyone.com . In addition, Ninety One continues to
monitor potential emerging risks and the risk of financial loss
resulting from the physical or transitional impacts of climate
change.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
For the six months ended 30 September 2023
The directors acknowledge their responsibility for the
preparation and presentation of the interim condensed consolidated
financial statements.
Each of the directors of Ninety One plc and Ninety One Limited
confirms to the best of his or her knowledge and belief that:
-- The condensed set of interim consolidated financial
statements, which comprises the condensed consolidated statement of
comprehensive income, condensed consolidated statement of financial
position, condensed consolidated statement of changes in equity,
condensed consolidated statement of cash flows and the related
explanatory notes, has been prepared in accordance with the basis
of preparation, which includes the IAS 34 Interim Financial
Reporting as issued by the International Accounting Standards Board
and as adopted for use in the UK (which is identical in all
material respects to the version issued by the IASB) and presents
fairly, in all material respects, the assets, liabilities,
financial position and profits of Ninety One for the six months
ended 30 September 2023.
-- Under the UK Disclosure Guidance and Transparency Rules
("DTR"), the interim management report includes a fair review of
the information required by:
-- DTR 4.2.7R, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the IFRS interim condensed consolidated financial
information and a description of the principal risks and
uncertainties for the remaining six months of the year; and
-- DTR 4.2.8R, being related party transactions that have taken
place in the first six months of the financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in Ninety One's Integrated Annual Report
2023, that could have had a material effect on the financial
position or performance of the enterprise in the first six months
of the current financial year.
-- The results for the six months ended 30 September 2023, taken
as a whole, present a fair, balanced and understandable assessment
of Ninety One's position and prospects.
There was no change to the board of directors during the six
months ended 30 September 2023. A list of current directors is
maintained on the Ninety One website: https://ninetyone.com .
On behalf of the board of directors
Hendrik du Toit
Kim McFarland
Chief Executive Officer
Finance Director
14 November 2023
14 November 2023
Independent review report of PricewaterhouseCoopers LLP to Ninety One
plc and PricewaterhouseCoopers Inc. to the shareholders of Ninety One
Limited
For the purpose of this report, the terms 'we' and 'our' denote
PricewaterhouseCoopers LLP in relation to UK legal, professional
and regulatory responsibilities and reporting obligations to Ninety
One plc and PricewaterhouseCoopers Inc. in relation to South
African legal, professional and regulatory responsibilities and
reporting obligations to the shareholders of Ninety One Limited.
When we refer to PricewaterhouseCoopers LLP or
PricewaterhouseCoopers Inc. such reference is to that specific
entity to the exclusion of the other.
The interim financial statements, as defined below, consolidate
the accounts of Ninety One plc and Ninety One Limited and their
respective subsidiaries (the "Group") and include the Group's share
of joint arrangements and associates.
PricewaterhouseCoopers LLP is the appointed auditor of Ninety
One plc ("the Company"), a company incorporated in the United
Kingdom in terms of the United Kingdom Companies Act 2006.
PricewaterhouseCoopers Inc. is the appointed auditor of Ninety One
Limited, a company incorporated in South Africa in terms of the
Companies Act of South Africa. PricewaterhouseCoopers LLP and
PricewaterhouseCoopers Inc. reviewed the interim financial
statements of the Group.
Report on the condensed consolidated interim financial
statements
We have reviewed Ninety One plc and Ninety One Limited's
condensed consolidated interim financial statements (the "interim
financial statements") in the accompanying interim report of Ninety
One plc and Ninety One Limited for the six month period ended 30
September 2023 (the "period"). The interim financial statements
comprise:
-- the condensed consolidated statement of financial position as at 30 September 2023;
-- the condensed consolidated statement of comprehensive income for the period then ended;
-- the condensed consolidated statement of cash flows for the period then ended;
-- the condensed consolidated statement of changes in equity for the period then ended; and
-- the notes, comprising a summary of significant accounting
policies and other explanatory information.
The interim financial statements included in the interim results
of Ninety One plc and Ninety One Limited have been prepared in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting', International Accounting Standard
34, 'Interim Financial Reporting', as issued by the International
Accounting Standards Board (IASB), the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority, the South African Institute of Chartered
Accountants (SAICA) Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as
issued by the South African Financial Reporting Standards Council
and the requirements of the Companies Act of South Africa.
Conclusion of PricewaterhouseCoopers LLP for Ninety One plc
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
Basis for PricewaterhouseCoopers LLP's conclusion for Ninety One
plc
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ('ISRE (UK) 2410'). A review of interim financial
information in accordance with ISRE (UK) 2410 consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review in accordance with ISRE (UK) 2410 is substantially less
in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information contained in the interim
results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions of PricewaterhouseCoopers LLP relating to going
concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
PricewaterhouseCoopers LLP's conclusion for Ninety One plc section
of this report, nothing has come to our attention to suggest that
the directors have inappropriately adopted the going concern basis
of accounting or that the directors have identified material
uncertainties relating to going concern that are not appropriately
disclosed. This conclusion is based on the review procedures
performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going
concern.
Conclusion of PricewaterhouseCoopers Inc. to the shareholders of
Ninety One Limited
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying interim financial
statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as issued by the IASB, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the South African
Financial Reporting Standards Council and the requirements of the
Companies Act of South Africa.
Basis for PricewaterhouseCoopers Inc.'s conclusion to the
shareholders of Ninety One Limited
We conducted our review in accordance with International
Standard on Review Engagements 2410, 'Review of Interim Financial
Information Performed by the Independent Auditor of the Entity'
('ISRE 2410') as issued by the International Auditing and Assurance
Standards Board. ISRE 2410 requires us to conclude whether anything
has come to our attention that causes us to believe that the
interim financial statements are not prepared in all material
respects in accordance with the applicable financial reporting
framework. This standard also requires us to comply with relevant
ethical requirements. A review of interim financial statements in
accordance with ISRE 2410 is a limited assurance engagement and
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review in accordance with ISRE 2410 is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion on these interim
financial statements.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim results, including the interim financial statements,
are the responsibility of, and have been approved by the directors.
The directors are responsible for preparing the interim results in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting', International Accounting Standard
34, 'Interim Financial Reporting', as issued by the IASB, the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the South African
Financial Reporting Standards Council and the requirements of the
Companies Act of South Africa, and for such internal control as the
directors determine is necessary to enable the preparation of
interim financial statements that are free from material
misstatement, whether due to fraud or error. In preparing the
interim results, including the interim financial statements, the
directors of Ninety One plc are responsible for assessing Ninety
One plc's and the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the interim results based on our
review.
Use of the review report of PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP's conclusions, including the
Conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for PricewaterhouseCoopers LLP's conclusion for Ninety One plc
paragraph of this report. This report, including the conclusions,
has been prepared for and only for the Company for the purpose of
complying with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and
for no other purpose. PricewaterhouseCoopers LLP does not, in
giving these conclusions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our
prior consent in writing.
PricewaterhouseCoopers LLP
PricewaterhouseCoopers Inc.
Chartered Accountants
C van den Heever
London, UK
Registered Auditor
14 November 2023
Cape Town, South Africa
14 November 2023
The examination of controls over the maintenance and integrity
of the Group's website is beyond the scope of the review of the
financial statements. Accordingly, we accept no responsibility for
any changes that may have occurred to the financial statements
since they were initially presented on the website.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 September 2023
Six months Six months
ended ended
30 September 30 September
2023 2022
GBP'm GBP'm
Notes (Reviewed) (Reviewed)
Revenue 2 350.2 384.3
Commission expense (55.9) (60.5)
------------ ------------
Net revenue 294.3 323.8
------------ ------------
Operating expenses 3 (202.4) (220.0)
Share of profit from associates 0.8 0.5
Net gain on investments and other income 4 4.9 5.4
------------ ------------
Operating profit 97.6 109.7
Interest income 5 8.3 2.7
Interest expense 5 (1.9) (1.8)
------------
Profit before tax 104.0 110.6
Tax expense 6 (24.7) (25.9)
------------ ------------
Profit after tax 79.3 84.7
Other comprehensive (expense)/income
Items that will not be reclassified to profit
or loss:
Net remeasurements on pension fund - 3.2
Tax effect of items that will not be reclassified
to profit or loss - (0.6)
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of foreign
subsidiaries (3.7) (2.3)
Other comprehensive (expense)/income for the
period (3.7) 0.3
Total comprehensive income for the period 75.6 85.0
============ ============
Earnings per share (pence)
Basic 7(a) 8.9 9.4
Diluted 7(a) 8.9 9.4
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September 2023
30 September 30 September 31 March
2023 2022 2023
GBP'm GBP'm GBP'm
Notes (Reviewed) (Reviewed) (Audited)
Assets (Restated)
(1)
Investments (1) 9 43.0 41.7 43.5
Investment in associates 1.4 0.7 1.3
Property and equipment 22.1 25.1 23.0
Right-of-use assets 73.8 82.5 76.7
Deferred tax assets 23.9 24.2 25.5
Other receivables 3.4 3.9 3.4
Pension fund asset 2.5 3.2 2.6
Total non-current assets 170.1 181.3 176.0
------------ ------------ ---------
Investments (1) 9 16.7 16.5 24.4
Linked investments backing policyholder
funds 12 9,724.8 10,094.4 9,962.6
Income tax recoverable 13.4 12.9 9.2
Trade and other receivables 230.2 363.9 260.6
Cash and cash equivalents 319.5 325.9 379.6
------------ ------------ ---------
Total current assets 10,304.6 10,813.6 10,636.4
------------ ------------ ---------
Total assets 10,474.7 10,994.9 10,812.4
============ ============ =========
Liabilities
Other liabilities 10 33.7 32.9 33.7
Lease liabilities 89.7 98.7 92.2
Deferred tax liabilities 29.3 8.5 24.3
Total non-current liabilities 152.7 140.1 150.2
------------ ------------ ---------
Policyholder investment contract
liabilities 12 9,709.6 10,119.7 9,967.3
Other liabilities 10 15.2 14.5 21.9
Lease liabilities 9.8 10.5 10.5
Trade and other payables 240.4 360.3 302.2
Income tax payable 9.2 11.2 10.4
------------ ------------ ---------
Total current liabilities 9,984.2 10,516.2 10,312.3
------------ ------------ ---------
Equity
Share capital 11(a) 424.7 441.2 441.2
Demerger reserves (re-presented) 11(b) (321.3) (321.3) (321.3)
Own share reserve 11(c) (53.0) (54.6) (51.4)
Other reserves (re-presented) 11(b) (13.4) 4.4 (6.6)
Retained earnings 300.6 268.8 287.9
------------ ------------ ---------
Shareholders' equity excluding non-controlling
interests 337.6 338.5 349.8
Non-controlling interests 0.2 0.1 0.1
------------ ------------ ---------
Total equity 337.8 338.6 349.9
------------ ------------ ---------
Total equity and liabilities 10,474.7 10,994.9 10,812.4
============ ============ =========
1. The comparative amounts have been restated to reclassify a portion
of a deferred compensation investments from current assets to non-current
assets. Accordingly, the prior period numbers for current investments
at 30 September 2022 changed from GBP47.9 million to GBP16.5 million
and non-current investments changed from GBP10.3 million to GBP41.7 million.
The purpose of this change is to better reflect the timing of the realisation
of the investments.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2023
Attributable to shareholders of parent
companies
------------------------------------------------------------------
Demerger Other
reserves Own reserves
Share (re-presented) share (re-presented) Retained Non-controlling Total
capital (1) reserve (1) earnings Total interests equity
Notes GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 April
2023 441.2 (321.3) (51.4) (6.6) 287.9 349.8 0.1 349.9
Profit for
the
period - - - - 79.2 79.2 0.1 79.3
Other comprehensive
expense - - - (3.7) - (3.7) - (3.7)
Total comprehensive
income - - - (3.7) 79.2 75.5 0.1 75.6
------- -------------- ------- -------------- -------- ------ --------------- ------
Transactions with
shareholders
Share-based
payment
charges
related
to Ninety
One
share scheme 11(b) - - - 7.1 - 7.1 - 7.1
Own shares
purchased 11(c) - - (12.0) - - (12.0) - (12.0)
Vesting and
release
of share
awards 11(b),(c) - - 10.4 (10.2) - 0.2 - 0.2
Share buyback
transactions 11(a) (16.5) - - - (4.3) (20.8) - (20.8)
Dividends
paid 8 - - - - (62.2) (62.2) - (62.2)
Total transactions
with shareholders (16.5) - (1.6) (3.1) (66.5) (87.7) - (87.7)
------- -------------- ------- -------------- -------- ------ --------------- ------
At 30
September
2023 424.7 (321.3) (53.0) (13.4) 300.6 337.6 0.2 337.8
======= ============== ======= ============== ======== ====== =============== ======
At 1 April
2022 441.2 (321.3) (35.7) 4.0 253.3 341.5 0.1 341.6
Profit for
the
period - - - - 84.7 84.7 - 84.7
Other comprehensive
income - - - (2.3) 2.6 0.3 - 0.3
Total comprehensive
income - - - (2.3) 87.3 85.0 - 85.0
------- -------------- ------- -------------- -------- ------ --------------- ------
Transactions with
shareholders
Share-based
payment
charges
related
to Ninety
One
share scheme 11(b) - - - 7.7 - 7.7 - 7.7
Deferred tax - - - - (1.3) (1.3) - (1.3)
Own shares
purchased 11(c) - - (23.8) - - (23.8) - (23.8)
Vesting and
release
of share
awards 11(b),(c) - - 4.9 (5.0) - (0.1) - (0.1)
Dividends
paid 8 - - - - (70.5) (70.5) - (70.5)
Total transactions
with shareholders - - (18.9) 2.7 (71.8) (88.0) - (88.0)
------- -------------- ------- -------------- -------- ------ --------------- ------
At 30
September
2022 441.2 (321.3) (54.6) 4.4 268.8 338.5 0.1 338.6
======= ============== ======= ============== ======== ====== =============== ======
1. Refer to note 11(b) for detail on re-presentation of other reserves.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 September 2023
Six months Six months
ended ended
30 September 30 September
2023 2022 (1)
GBP'm GBP'm
Notes (Reviewed) (Reviewed)
Cash flows from operations - shareholders 13(a) 57.2 36.8
Cash flows from operations - policyholders 13(a) (39.3) (52.0)
------------ ------------
Cash flows from operations 17.9 (15.2)
Interest received 8.4 2.7
Interest paid in respect of lease liabilities 13(b) (1.9) (1.8)
Contributions to pension fund - (0.1)
Dividends received from associates 0.6 0.5
Income tax paid (31.6) (29.1)
------------ ------------
Net cash flows from operating activities (6.6) (43.0)
------------ ------------
Cash flows from investing activities
Acquisition of investments (1) (12.5) (22.0)
Disposal of investments (1) 21.2 31.7
Additions to property and equipment (1.2) (0.6)
------------ ------------
Net cash flows from investing activities 7.5 9.1
------------ ------------
Cash flows from financing activities
Principal elements of lease payments 13(b) (4.9) (5.0)
Purchase of own shares 11(c) (12.0) (23.8)
Share buyback (18.8) -
Dividends paid 8 (62.2) (70.5)
------------ ------------
Net cash flows from financing activities (97.9) (99.3)
------------ ------------
Cash and cash equivalents at 1 April 450.9 570.3
Net change in cash and cash equivalents (97.0) (133.2)
Effect of foreign exchange rate changes (1.4) (10.3)
------------
Cash and cash equivalents at 30 September 352.5 426.8
------------ ------------
Cash and cash equivalents at 30 September
consist of:
Cash and cash equivalents available for use
by the Group 319.5 325.9
Cash and cash equivalents presented within
other assets
Cash and cash equivalents presented within
linked investments backing policyholder funds 33.0 100.9
------------
Cash and cash equivalents at 30 September 352.5 426.8
------------ ------------
1. Acquisition and disposal of investments were presented as "Net disposal
of investments" of GBP9.7 million for the six months ended 30 September
2022. This was changed in the current period to appropriately reflect
gross cash flows.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 September 2023
General information
Ninety One operates as a dual-listed company ("DLC") under a DLC
structure. The DLC structure comprises Ninety One plc, a public
company incorporated in the England and Wales under the UK
Companies Act 2006 and Ninety One Limited, a public company
incorporated in South Africa under the South African Companies Act
71 of 2008. Under the DLC structure, Ninety One plc and Ninety One
Limited, together with their direct and indirect subsidiaries,
effectively form a single economic enterprise (the "Group") in
which the economic and voting rights of ordinary shareholders of
the companies are maintained in equilibrium relative to each other.
The Group is listed on the London and Johannesburg Stock
Exchanges.
1 Basis of preparation
The interim condensed consolidated financial statements for the
six months ended 30 September 2023 ("Interim financial statements")
have been prepared in accordance with:
- IAS 34 Interim Financial Reporting as issued by the
International Accounting Standards Board ("IASB") and UK-adopted
International Accounting Standard 34 Interim Financial Reporting,
which as it applies to the Group's Interim financial statements, is
identical in all material respects to the version issued by the
IASB;
- the accounting policies and significant judgements and
estimates applied in the preparation of these Interim financial
statements are consistent with those applied to the Group's
consolidated financial statements for the year ended 31 March
2023;
- the South African Institute of Chartered Accountants ("SAICA")
Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council and the requirements of the Companies
Act of South Africa; and
- the Disclosure Guidance and Transparency Rules ("DTR") of the
Financial Conduct Authority in the UK.
The Interim financial statements have been prepared on the
historical cost basis with the exception of linked investments
backing policyholder funds, policyholder investment contract
liabilities, investments, money market funds within cash and cash
equivalents, other liabilities and the pension fund asset which are
measured at fair value through profit or loss.
The Interim financial statements do not constitute statutory
accounts as defined in Section 435 of the Companies Act 2006 in the
UK. The results for the full year 31 March 2023 have been taken
from the Group's Integrated Annual Report 2023. Therefore, these
interim results should be read in conjunction with the Integrated
Annual Report 2023 which were prepared in accordance with
UK-adopted international accounting standards, International
Financial Reporting Standards as issued by the IASB and under the
DTR at that time. PricewaterhouseCoopers LLP reported on the 31
March 2023 financial statements, and their report was unmodified
and did not contain a statement under Section 498(2) or (3) of the
Companies Act 2006 in the UK. The Integrated Annual Report 2023 has
been filed with the Registrar of Companies in the UK.
The Interim financial statements are unaudited but have been
reviewed by PricewaterhouseCoopers LLP and PricewaterhouseCoopers
Inc., who expressed unmodified review conclusions.
The presentation currency of the Group is Pounds Sterling
("GBP"), being the functional currency of Ninety One plc. The
functional currency of Ninety One Limited is South African Rand.
All values are rounded to the nearest million ("GBP'm"), unless
otherwise indicated.
The functional currencies of subsidiary undertakings are
determined based on the primary economic environment in which the
entity operates. Foreign currency transactions are translated into
the functional currency of the entity in which the transactions
arise, based on rates of exchange ruling at the date of the
transactions.
Going concern
The Board of Directors has considered the resilience of the
Group and taking into account its current financial position and
the principal and emerging risks facing the business, including the
impacts that climate change, current events and market conditions
have had on the Group's financial performance and outlook. The
Board of Directors has performed a going concern assessment by
applying various stressed scenarios, including plausible downside
assumptions, about the impact on assets under management,
profitability of the Group and known commitments. All scenarios
show that the Group would maintain sufficient resources to enable
it to continue operating profitably for a period of at least 12
months from the date of the release of these results. The Interim
financial statements have therefore been prepared on a going
concern basis.
2 Segmental reporting
Revenue primarily consists of management fees and performance
fees derived from investment management activities. As an
integrated global investment manager, the Group operates a
single-segment investment management business. All financial,
business and strategic decisions are made centrally by the chief
operating decision maker (the "CODM") of the Group. The CODM is the
Chief Executive Officer of the Group. Reporting provided to the
CODM is on an aggregated basis which is used for evaluating the
Group's performance and the allocation of resources. The CODM
monitors operating profit for the purpose of making decisions about
resource allocation and performance assessment. Given that only one
segment exists, no additional information is presented in relation
to it, as it is disclosed throughout the Interim financial
statements. Revenue is disaggregated by geographic location of
contractual entities, as this best depicts how the nature, amount,
timing and uncertainty of the Group's revenue and cash flows are
affected by economic factors. Revenue is generated from a
diversified customer base and the Group has no single customer that
it relies on. Non-current assets other than financial instruments
and deferred tax assets are allocated based on where the assets are
physically located.
Six months Six months
ended ended
30 September 30 September
2023 2022
Revenue from external clients Notes GBP'm GBP'm
United Kingdom 229.6 255.8
South Africa 77.8 83.0
Rest of the world 42.8 45.5
------------ ------------
350.2 384.3
------------ ------------
Performance fees included in revenue above 12.1 11.0
------------ ------------
Non-current assets
United Kingdom 70.7 76.6
South Africa 2.3 4.9
Rest of the world 24.3 26.8
------------ ------------
97.3 108.3
------------ ------------
Six months Six months
ended ended
30 September 30 September
2023 2022
3 Operating expenses by nature GBP'm GBP'm
Staff expenses 132.5 147.3
Deferred employee benefit scheme loss (0.2) (1.8)
Depreciation of right-of-use assets 13(a) 4.6 4.9
Depreciation of property and equipment 13(a) 2.0 2.5
Auditors' remuneration 0.9 0.9
Other administrative expenses 62.6 66.2
------------ ------------
202.4 220.0
------------ ------------
Six months Six months
ended ended
30 September 30 September
2023 2022
4 Net gain on investments and other income GBP'm GBP'm
Deferred employee benefit scheme loss (0.2) (1.8)
Gain/(loss) on other investments 0.9 (1.1)
------------ ------------
Net gain/(loss) on investments 13(a) 0.7 (2.9)
Foreign exchange gain 0.5 7.4
Subletting income 0.6 0.6
Other income 3.1 0.3
------------
4.9 5.4
------------ ------------
Six months Six months
ended ended
30 September 30 September
2023 2022
5 Interest income/expense GBP'm GBP'm
Interest income from financial assets measured
at amortised cost 2.0 1.0
Interest income from money market funds measured
at fair value through profit or loss 6.3 1.7
------------ ------------
Interest income 13(a) 8.3 2.7
------------ ------------
Interest expense on lease liabilities 13(b) (1.9) (1.8)
Interest expense 13(a) (1.9) (1.8)
------------ ------------
Six months Six months
ended ended
30 September 30 September
2023 2022
6 Tax expense GBP'm GBP'm
Current tax - current year 23.9 24.7
Current tax - adjustment for prior years (0.4) (0.2)
Current tax expense 23.5 24.5
------------ ------------
Deferred tax - current year 1.2 1.8
Deferred tax - adjustment for prior years - 0.4
Deferred tax - change in corporate tax
rates - (0.8)
Deferred tax expense 1.2 1.4
------------ ------------
24.7 25.9
------------ ------------
The estimated average annual effective tax rate used for the six
months ended 30 September 2023 is 23.8% (30 September 2022: 23.4%).
The increase is largely driven by the increase in corporate tax
rate in the UK from 19% to 25% on 1 April 2023.
7 Earnings per share
The Group calculates earnings per share ("EPS") on a number of
different bases in accordance with IFRS and prevailing South
African requirements.
7(a) Basic and diluted earnings per share
The calculations of basic and diluted EPS are based on IAS 33
Earnings Per Share.
Basic EPS is calculated by dividing profit attributable to
shareholders by the weighted average number of ordinary shares
outstanding during the period, excluding own shares held by the
Group.
Diluted EPS is calculated by dividing profit attributable to
shareholders by the weighted average number of ordinary shares
outstanding during the period, plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
potentially dilutive shares into ordinary shares.
Six months Six months
ended ended
30 September 30 September
2023 2022
GBP'm GBP'm
Profit attributable to shareholders 79.3 84.7
------------ ------------
The calculation of the weighted average number of ordinary
shares for the purpose of calculating basic and diluted earnings
per share is:
Number of Number of
shares shares
Millions Millions
Weighted average number of ordinary shares
for the purpose of calculating basic EPS 895.5 900.0
Effect of dilutive potential shares - share
awards - 1.7
---------
Weighted average number of ordinary shares for
the purpose of calculating diluted EPS 895.5 901.7
--------- ---------
Basic EPS (pence) 8.9 9.4
Diluted EPS (pence) 8.9 9.4
7(b) Headline earnings and diluted headline earnings per
share
The Group is required to calculate headline earnings per share
("HEPS") in accordance with the JSE Listings Requirements,
determined by reference to circular 1/2023 "Headline Earnings"
issued by the South African Institute of Chartered Accountants.
There are no adjustments between profit attributable to
shareholders and headline earnings for the six months ended 30
September 2023 and 2022. As a result, HEPS and diluted HEPS are the
same as basic EPS and diluted EPS.
Six months ended Six months ended
30 September 2023 30 September 2022
Pence per Pence per
8 Dividends share GBP'm share GBP'm
Prior year's final dividend paid 6.7 62.2 7.7 70.5
------------ ------ ------------ ------
On 14 November 2023, the Board of Directors declared an interim
dividend for the six months ended 30 September 2023 of 5.9 pence
per ordinary share, an estimated GBP53.7 million in total. The
dividend is expected to be paid on 22 December 2023 to shareholders
on the register at the close of business on 8 December 2023.
30 September 30 September 31 March
2023 2022 2023
9 Investments GBP'm GBP'm GBP'm
Non-current (Restated)
(1)
Investment in unlisted investment
vehicles 8.8 6.4 8.0
Deferred compensation investments
(1) 30.3 31.4 31.4
Other investments 3.9 3.9 4.1
43.0 41.7 43.5
-------------- ------------- --------
Current
Deferred compensation investments
(1) 13.7 13.8 21.5
Seed investments 3.0 2.7 2.9
16.7 16.5 24.4
-------------- ------------- --------
1. The comparative amounts have been restated to reclassify a portion
of a deferred compensation investments for current assets to non-current
assets. Accordingly, the prior period numbers for current investments
at 30 September 2022 changed from GBP47.9 million to GBP16.5 million
and non-current investments changed from GBP10.3 million to GBP41.7
million. The purpose of this change is to better reflect the timing
of the realisation of the investments.
30 September 30 September 31 March
2023 2022 2023
10 Other liabilities GBP'm GBP'm GBP'm
Non-current
Deferred compensation liabilities 32.1 31.6 31.9
Other liabilities 1.6 1.3 1.8
33.7 32.9 33.7
------------ ------------ --------
Current
Deferred compensation liabilities 15.2 14.5 21.9
------------ ------------ --------
48.9 47.4 55.6
------------ ------------ --------
11 Share capital and other reserves
11(a) Share capital
During the six months ended 30 September 2023, the Group bought
back and cancelled 11.2 million shares in Ninety One Limited
on-market for a total consideration of R440.5 million including
transaction costs. These transactions have resulted in a reduction
in share capital of R339.1 million (equivalent to GBP16.5 million)
and retained earnings of R101.4 million (equivalent to GBP4.3
million). Total ordinary shares in issue and share capital of the
Group at 30 September 2023 were 911.5 million shares with nominal
value of GBP424.7 million.
Subsequently, the Group bought back a further 4.1 million shares
in Ninety One Limited for a total consideration of R156.4 million
including transaction costs.
To maintain the same equalisation ratio in the DLC structure, an
equal amount of special converting shares in Ninety One plc were
redeemed following the cancellation of ordinary shares in Ninety
One Limited.
11(b) Demerger reserves and other reserves
In the prior period, demerger reserves and other reserves were
presented together as "Other reserves". They have been separately
presented in the current period and the comparatives have been
re-presented accordingly. The change is considered to improve the
clarity of the presentation to distinguish between the reserves
arising during the demerger from Investec and other reserves.
Demerger reserve
The Group was demerged from Investec in March 2020 and reserves
were created during the demerger process as below:
30 September 30 September 31 March
2023 2022 2023
GBP'm GBP'm GBP'm
Distributable reserve 732.2 732.2 732.2
Merger reserve 183.0 183.0 183.0
DLC reserve (1,236.5) (1,236.5) (1,236.5)
------------ ---------
(321.3) (321.3) (321.3)
------------ ------------ ---------
Other reserves
The movements in other reserves during the period/year were:
Share-based Foreign currency
payments translation
reserve reserve Total
GBP'm GBP'm GBP'm
At 1 April 2023 29.6 (36.2) (6.6)
Foreign exchange differences on
translation of foreign subsidiaries - (3.7) (3.7)
Share-based payment charges 7.1 - 7.1
Vesting and release of share awards (10.2) - (10.2)
At 30 September 2023 26.5 (39.9) (13.4)
=========== ================ ======
At 1 April 2022 24.2 (20.2) 4.0
Foreign exchange differences on
translation of foreign subsidiaries - (2.3) (2.3)
Share-based payment charges 7.7 - 7.7
Vesting and release of share awards (5.0) - (5.0)
At 30 September 2022 26.9 (22.5) 4.4
=========== ================ ======
At 1 April 2022 24.2 (20.2) 4.0
Foreign exchange differences on
translation of foreign subsidiaries - (16.0) (16.0)
Share-based payment charges 14.2 - 14.2
Vesting and release of share awards (8.8) - (8.8)
At 31 March 2023 29.6 (36.2) (6.6)
=========== ================ ======
11(c) Own share reserve
Movements in the own shares reserve during the period/year
were:
30 September 2023 30 September 2022 31 March 2023
Number Number Number
of shares of shares of shares
Millions GBP'm Millions GBP'm Millions GBP'm
Opening balance 22.6 51.4 17.6 35.7 17.6 35.7
Own shares purchased 7.1 12.0 10.0 23.8 10.0 23.8
Own shares released (4.7) (10.4) (3.1) (4.9) (5.0) (8.1)
Closing balance 25.0 53.0 24.5 54.6 22.6 51.4
----------- ------ ------------ ----- ---------- -----
12 Fair values of financial instruments
The fair values of all financial instruments are substantially
similar to carrying values reflected in the condensed consolidated
statement of financial position as they are short-term in nature,
subject to variable, market-related interest rates or stated at
fair value in the condensed consolidated statement of financial
position. The Group measures fair values including policyholders'
assets and liabilities using the following fair value hierarchy
that reflects the significance of the inputs used in making the
measurements:
Level 1: Quoted market price (unadjusted) in an active market
for an identical instrument.
Level 2: Prices that are not traded in an active market but are
determined using valuation techniques, which are based on
observable inputs. The Group's level 2 financial instruments
principally comprise unquoted investments including equities,
mutual funds, collective investment schemes, debt securities,
derivatives and policyholder investment contract liabilities.
Valuation techniques may include using a broker quote in an active
market or an evaluated price based on a compilation of primarily
observable market information utilising information readily
available via external sources.
Level 3: Valuation techniques where one or more significant
inputs are unobservable.
Financial instruments measured at fair value at the end of the
reporting period by the level in the fair value hierarchy were:
Level 1 Level 2 Level 3 Total
At 30 September 2023 Notes GBP'm GBP'm GBP'm GBP'm
Deferred compensation investments 9 44.0 - - 44.0
Seed investments 9 3.0 - - 3.0
Unlisted investment vehicles 9 - - 8.8 8.8
Other investments 9 - 3.9 - 3.9
Money market funds 236.8 - - 236.8
Investments backing policyholder
funds 724.5 8,943.0 57.3 9,724.8
Total financial assets measured
at fair value 1,008.3 8,946.9 66.1 10,021.3
-------- ---------- ------- ----------
Policyholder investment contract
liabilities - (9,709.6) - (9,709.6)
Other liabilities 10 (48.9) - - (48.9)
Total financial liabilities
measured at fair value (48.9) (9,709.6) - (9,758.5)
-------- ---------- ------- ----------
At 30 September 2022 (Restated)
Deferred compensation investments 9 45.2 - - 45.2
Seed investments 9 2.7 - - 2.7
Unlisted investment vehicles 9 - - 6.4 6.4
Other investments 9 - 3.9 - 3.9
Money market funds (1) 164.7 - - 164.7
Investments backing policyholder
funds (2) 815.9 9,218.8 59.7 10,094.4
Total financial assets measured
at fair value 1,028.5 9,222.7 66.1 10,317.3
-------- ---------- ------- ----------
Policyholder investment contract
liabilities (3) - (10,119.7) - (10,119.7)
Other liabilities 10 (47.4) - - (47.4)
Total financial liabilities
measured at fair value (47.4) (10,119.7) - (10,167.1)
-------- ---------- ------- ----------
Level 1 Level 2 Level 3 Total
At 31 March 2023 Notes GBP'm GBP'm GBP'm GBP'm
Deferred compensation investments 9 52.9 - - 52.9
Seed investments 9 2.9 - - 2.9
Unlisted investment vehicles 9 - - 8.0 8.0
Other investments 9 - 4.1 - 4.1
Money market funds 280.1 - - 280.1
Investments backing policyholder
funds 800.5 9,116.2 45.9 9,962.6
Total financial assets measured
at fair value 1,136.4 9,120.3 53.9 10,310.6
-------- ---------- ------- ----------
Policyholder investment contract
liabilities - (9,967.3) - (9,967.3)
Other liabilities 10 (55.6) - - (55.6)
Total financial liabilities
measured at fair value (55.6) (9,967.3) - (10,022.9)
-------- ---------- ------- ----------
1. The comparative amounts have been restated to reflect the reclassification
of money market funds from financial assets measured at amortised
cost to financial assets measured at FVTPL. Money market funds are
classified as level 1 financial instruments in the fair value hierarchy.
2. The comparative amount for interest-bearing stocks, debentures
and other loans within investment backing policyholder funds of GBP1,760.3
million was reclassified from level 1 to level 2 to correctly reflect
the measurement of these investments.
3. The comparative amounts were reclassified as level 2 to align with
the fair value measurement policy.
During all of the above reporting periods, there were no
transfers between level 1 and level 2, or transfers into or out of
level 3. The Group's policy is to recognise transfers between
levels of fair value hierarchy as at the end of the reporting
period in which they occur. Carrying amounts of the financial
assets and financial liabilities measured at amortised cost
approximate fair value.
Information about level 3 fair value measurements
Unlisted investment vehicles represent the Group's investment in
Ninety One Africa Private Equity Fund 2 L.P. and Ninety One Global
Alternative Fund 2 SCSp RAIF - European Credit Opportunities Fund 1
at 30 September 2023, 30 September 2022 and 31 March 2023. The key
unobservable input used in measuring their fair values is the value
of the underlying investments of these funds which are calculated
by the General Partners using multiple valuation techniques such as
amortised cost, EBITA multiple or NPV.
Investments backing policyholder funds include credit exposures
that are not actively traded and where the principal input in their
valuation (i.e. credit spreads) is unobservable. Accordingly, an
alternative valuation methodology has been applied being an EBITDA
multiple, discounted cashflow models with spread adjustments for
any credit rating downgrades or expected cost recovery. All of the
investment risk associated with these assets is borne by
policyholders and that the value of these assets is exactly matched
by a corresponding liability due to policyholders. The Group bears
no risk from a change in the market value of these assets except to
the extent that it has an impact on management fees earned.
A sensitivity analysis on the Group's level 3 investments has
not been presented as the "stressing" of the significant
unobservable inputs applied in the valuation does not have a
material impact on the Interim financial statements.
The movements during the period/year in the balance of the level
3 fair value measurements were:
30 September 30 September 31 March
2023 2022 2023
Unlisted investment vehicles GBP'm GBP'm GBP'm
Opening balance 8.0 3.5 3.5
Purchase - 2.3 4.3
Unrealised gain 0.8 0.6 0.2
Closing balance 8.8 6.4 8.0
------------ ------------ --------
30 September 30 September 31 March
2023 2022 2023
Investments backing policyholder GBP'm GBP'm GBP'm
funds
Opening balance 45.9 63.9 63.9
Purchase/(disposal) 17.0 (2.8) (10.1)
Unrealised (loss)/gain (3.9) 1.8 0.1
Foreign exchange adjustment (1.7) (3.2) (8.0)
Closing balance 57.3 59.7 45.9
------------ ------------ --------
13 Notes to the condensed consolidated statement of cash
flows
13(a) Reconciliation of cash flows from operations
Six months Six months
ended ended
30 September 30 September
2023 2022
Notes GBP'm GBP'm
Cash flows from operations - shareholders
(1)
Profit before tax 104.0 110.6
Adjusted for:
Net (gain)/loss on investments 4 (0.7) 2.9
Depreciation of right-of-use assets 3 4.6 4.9
Depreciation of property and equipment 3 2.0 2.5
Interest income 5 (8.3) (2.7)
Interest expense 5 1.9 1.8
Net loss of pension fund 0.1 -
Share of profit from associates (0.8) (0.5)
Share-based payments amortisations related
to Ninety One share scheme 11(b) 7.1 7.7
Working capital changes:
Trade and other receivables 33.4 (101.8)
Trade and other payables (79.6) 28.5
Other liabilities (6.5) (17.1)
57.2 36.8
------------ ------------
Cash flows from operations - policyholders
(1)
Net fair value losses on linked investments
backing policyholder funds 62.1 454.2
Net fair value change on policyholder investment
contract liabilities 128.0 (266.0)
Net contribution received from policyholders 37.4 140.6
Net acquisition of linked investments backing
policyholder funds (281.4) (361.6)
Working capital changes:
Trade and other receivables (3.1) 3.4
Trade and other payables 17.7 (22.6)
(39.3) (52.0)
------------ ------------
1. The comparative amounts have been re-presented to include
the split of shareholder and policyholder cash flows.
13(b) Reconciliation of liabilities arising from financing
activities
The table below details changes in the Group's liabilities from
financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are liabilities for
which cash flows were, or future cash flows will be, classified in
the condensed consolidated statement of cash flows as cash flows
from financing activities.
Lease liabilities
--------------------------
Six months Six months
ended ended
30 September 30 September
2023 2022
GBP'm GBP'm
At 1 April 102.7 109.4
Changes from cash flows:
Principal elements of lease payments (4.9) (5.0)
Interest paid in respect of lease liabilities (1.9) (1.8)
------------ ------------
Payment of lease liabilities (6.8) (6.8)
Other changes:
Additions and remeasurement of lease liabilities 1.5 1.1
Interest expense on lease liabilities 5 1.9 1.8
Foreign exchange adjustment 0.2 3.7
At 30 September 99.5 109.2
------------ ------------
14 Events after the reporting date
Other than the dividend declared by the Board presented in note
8 and share buybacks presented in note 11 (a), no event was noted
after the reporting date that would require disclosures in or
adjustments to the condensed consolidated financial statements.
Annexure to the condensed consolidated financial statements
Condensed consolidated statement of financial position
(including policyholder figures) - Unaudited
At 30 September At 30 September At 31 March 2023
2023 2022
--------------------------------------- --------------------------------------- ---------------------------------------
Policy-holders Share-holders Total Policy-holders Share-holders Total Policy-holders Share-holders Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Assets
Investments - 43.0 43.0 - 41.7 41.7 - 43.5 43.5
Investment in
associates - 1.4 1.4 - 0.7 0.7 - 1.3 1.3
Property and
equipment - 22.1 22.1 - 25.1 25.1 - 23.0 23.0
Right-of-use
assets - 73.8 73.8 - 82.5 82.5 - 76.7 76.7
Deferred tax
assets - 23.9 23.9 - 24.2 24.2 - 25.5 25.5
Other
receivables - 3.4 3.4 - 3.9 3.9 - 3.4 3.4
Pension fund
asset - 2.5 2.5 - 3.2 3.2 - 2.6 2.6
Total
non-current
assets - 170.1 170.1 - 181.3 181.3 - 176.0 176.0
-------------- ------------- -------- -------------- ------------- -------- -------------- ------------- --------
Investments - 16.7 16.7 - 16.5 16.5 - 24.4 24.4
Linked
investments
backing
policyholder
funds 9,724.8 - 9,724.8 10,094.4 - 10,094.4 9,962.6 - 9,962.6
Income tax
recoverable - 13.4 13.4 - 12.9 12.9 0.3 8.9 9.2
Trade and other
receivables 67.8 162.4 230.2 63.3 300.6 363.9 64.7 195.9 260.6
Cash and cash
equivalents - 319.5 319.5 - 325.9 325.9 - 379.6 379.6
Total current
assets 9,792.6 512.0 10,304.6 10,157.7 655.9 10,813.6 10,027.6 608.8 10,636.4
-------------- ------------- -------- -------------- ------------- -------- -------------- ------------- --------
Total assets 9,792.6 682.1 10,474.7 10,157.7 837.2 10,994.9 10,027.6 784.8 10,812.4
============== ============= ======== ============== ============= ======== ============== ============= ========
Liabilities
Other
liabilities - 33.7 33.7 - 32.9 32.9 - 33.7 33.7
Lease
liabilities - 89.7 89.7 - 98.7 98.7 - 92.2 92.2
Deferred tax
liabilities 29.2 0.1 29.3 8.1 0.4 8.5 24.2 0.1 24.3
Total
non-current
liabilities 29.2 123.5 152.7 8.1 132.0 140.1 24.2 126.0 150.2
-------------- ------------- -------- -------------- ------------- -------- -------------- ------------- --------
Policyholder
investment
contract
liabilities 9,709.6 - 9,709.6 10,119.7 - 10,119.7 9,967.3 - 9,967.3
Other
liabilities - 15.2 15.2 - 14.5 14.5 - 21.9 21.9
Lease
liabilities - 9.8 9.8 - 10.5 10.5 - 10.5 10.5
Trade and other
payables 53.8 186.6 240.4 29.9 330.4 360.3 36.1 266.1 302.2
Income tax
payable - 9.2 9.2 - 11.2 11.2 - 10.4 10.4
Total current
liabilities 9,763.4 220.8 9,984.2 10,149.6 366.6 10,516.2 10,003.4 308.9 10,312.3
-------------- ------------- -------- -------------- ------------- -------- -------------- ------------- --------
Equity
Share capital - 424.7 424.7 - 441.2 441.2 - 441.2 441.2
Demerger
reserves - (321.3) (321.3) - (321.3) (321.3) - (321.3) (321.3)
Own share
reserve - (53.0) (53.0) - (54.6) (54.6) - (51.4) (51.4)
Other reserves - (13.4) (13.4) - 4.4 4.4 - (6.6) (6.6)
Retained
earnings - 300.6 300.6 - 268.8 268.8 - 287.9 287.9
Shareholders'
equity
excluding
non-controlling
interests - 337.6 337.6 - 338.5 338.5 - 349.8 349.8
Non-controlling
interests - 0.2 0.2 - 0.1 0.1 - 0.1 0.1
-------------- ------------- -------- -------------- ------------- -------- -------------- ------------- --------
Total equity - 337.8 337.8 - 338.6 338.6 - 349.9 349.9
-------------- ------------- -------- -------------- ------------- -------- -------------- ------------- --------
Total equity and
liabilities 9,792.6 682.1 10,474.7 10,157.7 837.2 10,994.9 10,027.6 784.8 10,812.4
============== ============= ======== ============== ============= ======== ============== ============= ========
Condensed consolidated statement of cash flows (including
policyholder figures) - Unaudited
Six months ended 30 September Six months ended 30 September
2023 2022
------------------------------------- --------------------------------------
Policy-holders Share-holders Total Policy-holders Share-holders Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Cash flows from operations (39.3) 57.2 17.9 (52.0) 36.8 (15.2)
Interest received - 8.4 8.4 - 2.7 2.7
Interest paid in respect of
lease liabilities - (1.9) (1.9) - (1.8) (1.8)
Contributions to pension fund - - - - (0.1) (0.1)
Dividends received from associates - 0.6 0.6 - 0.5 0.5
Income tax paid - (31.6) (31.6) - (29.1) (29.1)
-------------- ------------- ------ -------------- ------------- -------
Net cash flows from operating
activities (39.3) 32.7 (6.6) (52.0) 9.0 (43.0)
-------------- ------------- ------ -------------- ------------- -------
Cash flows from investing
activities
Net disposal of investments - 8.7 8.7 - 9.7 9.7
Additions to property and
equipment - (1.2) (1.2) - (0.6) (0.6)
-------------- ------------- ------ -------------- ------------- -------
Net cash flows from investing
activities - 7.5 7.5 - 9.1 9.1
-------------- ------------- ------ -------------- ------------- -------
Cash flows from financing
activities
Principal elements of lease
payments - (4.9) (4.9) - (5.0) (5.0)
Purchase of own shares - (12.0) (12.0) - (23.8) (23.8)
Share buyback - (18.8) (18.8) - - -
Dividends paid - (62.2) (62.2) - (70.5) (70.5)
-------------- ------------- ------ -------------- ------------- -------
Net cash flows from financing
activities - (97.9) (97.9) - (99.3) (99.3)
-------------- ------------- ------ -------------- ------------- -------
Cash and cash equivalents
at 1 April 71.3 379.6 450.9 163.7 406.6 570.3
Net change in cash and cash
equivalents (39.3) (57.7) (97.0) (52.0) (81.2) (133.2)
Effect of foreign exchange
rate changes 1.0 (2.4) (1.4) (10.8) 0.5 (10.3)
-------------- ------------- ------ -------------- ------------- -------
Cash and cash equivalents
at 30 September 33.0 319.5 352.5 100.9 325.9 426.8
============== ============= ====== ============== ============= =======
SHAREHOLDER INFORMATION AND DIVID DECLARATION
In terms of the DLC structure, Ninety One plc shareholders
registered on the United Kingdom share register may receive all or
part of their dividend entitlements through dividends declared and
paid by Ninety One plc on their ordinary shares and/or through
dividends declared and paid on the SA DAN share issued by Ninety
One Limited.
Ninety One plc shareholders registered on the South African
branch register may receive all or part of their dividend
entitlements through dividends declared and paid by Ninety One plc
on their ordinary shares and/or through dividends declared and paid
on the SA DAS share issued by Ninety One Limited.
Ninety One plc dividend declaration
The Board has declared a gross interim dividend of 5.9 pence per
share. The interim dividend will be paid on 22 December 2023 to
shareholders recorded in the shareholder registers of the company
at close of business on 8 December 2023.
Ninety One plc shareholders registered on the United Kingdom
share register, will receive their dividend payment by Ninety One
plc of 5.9 pence per ordinary share.
Ninety One plc shareholders registered on the South African
branch register, will receive their dividend payment by Ninety One
Limited, on the SA DAS share, equivalent to 5.9 pence per ordinary
share.
The relevant dates for the payment of the
dividend are as follows:
Last day to trade cum-dividend
On the Johannesburg Stock Exchange ("JSE") Tuesday, 5 December 2023
On the London Stock Exchange ("LSE") Wednesday, 6 December 2023
Shares commence trading ex-dividend
On the JSE Wednesday, 6 December 2023
On the LSE Thursday, 7 December 2023
Record date (on the JSE and LSE) Friday, 8 December 2023
Payment date (on the JSE and LSE) Friday, 22 December 2023
Share certificates on the South African branch register may not
be dematerialised or rematerialised between Wednesday, 6 December
2023 and Friday 8, December 2023, both dates inclusive, nor may
transfers between the United Kingdom share register and the South
African branch register take place between Wednesday, 6 December
2023 and Friday, 8 December 2023, both dates inclusive.
Additional information for Ninety One shareholders registered on
the South African branch register
-- The interim dividend declared by Ninety One plc to
shareholders registered on the South African branch register is a
local payment derived from funds sourced in South Africa.
-- Shareholders registered on the South African branch register
are advised that the distribution of 5.90000 pence, equivalent to a
gross dividend of 135.97199 cents per share (rounded to 136.00000
cents per share), has been arrived at using the rand/pound sterling
average buy/sell spot rate of ZAR23.0461/GBP, as determined at
11:00 (SA time) on Tuesday, 14 November 2023. Consequently, tax
will be calculated on the gross dividend of 136.00000 cents per
share.
-- Ninety One plc United Kingdom tax reference number: 623 59652 16053.
-- The issued ordinary share capital of Ninety One plc is 622,624,622 ordinary shares.
-- The dividend paid by Ninety One plc to South African resident
shareholders registered on the South African branch register and
the dividend paid by Ninety One Limited to Ninety One plc
shareholders on the SA DAS share are subject to South African
Dividend Tax ("Dividend Tax") of 20% (subject to any available
exemptions as legislated).
-- Shareholders registered on the South African branch register
who are exempt from paying the Dividend Tax will receive a dividend
of 136.00000 cents per share, paid by Ninety One Limited on the SA
DAS share.
-- Shareholders registered on the South African branch register
who are not exempt from paying the Dividend Tax will receive a
dividend of 108.80000 cents per share (gross dividend of 136.00000
cents per share less Dividend Tax of 27.20000 cents per share) paid
by Ninety One Limited on the SA DAS share.
By order of the board
Amina Rasool
Company Secretary
14 November 2023
Ninety One Limited dividend declaration
The Board has declared a gross interim dividend of 136.00000
cents per share. The interim dividend will be paid on 22 December
2023 to shareholders recorded in the shareholder register of the
company at close of business 8 December 2023.
The relevant dates for the payment of the dividend are as
follows:
Last day to trade cum-dividend Tuesday, 5 December 2023
Shares commence trading ex-dividend Wednesday, 6 December 2023
Record date Friday, 8 December 2023
Payment date Friday, 22 December 2023
The interim gross dividend of 135.97199 cents per ordinary share
(rounded to 136.00000 cents per ordinary share) has been determined
by converting the Ninety One plc distribution of 5.90000 pence per
ordinary share into rands using the rand/pound sterling average
buy/sell spot rate of ZAR23.0461/GBP, as determined at 11:00 (SA
time) on Tuesday, 14 November 2023. Consequently, tax will be
calculated on the gross dividend of 136.00000 cents per share.
Share certificates may not be dematerialised or rematerialised
between Wednesday 6 December 2023 and Friday 8 December 2023 , both
dates inclusive.
Additional information to take note of:
-- The interim dividend declared by Ninety One Limited to
shareholders registered on the South African register is a local
payment derived from funds sourced in South Africa.
-- Ninety One Limited South African tax reference number: 9661 9311 71.
-- The issued ordinary share capital of Ninety One Limited is 284,754,801 ordinary shares.
-- The dividend paid by Ninety One Limited is subject to South
African Dividend Tax ("Dividend Tax") of 20% (subject to any
available exemptions as legislated).
-- Shareholders who are exempt from paying the Dividend Tax will
receive a dividend of 136.00000 cents per ordinary share.
-- Shareholders who are not exempt from paying the Dividend Tax
will receive a dividend of 108.80000 cents per ordinary share
(gross dividend of 136.00000 cents per ordinary share less Dividend
Tax of 27.20000 cents per ordinary share).
By order of the board
Ninety One Africa Proprietary Limited
Company Secretary
14 November 2023
Date of release: 15 November 2023
JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
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END
IR QZLFFXFLLFBB
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November 15, 2023 02:00 ET (07:00 GMT)
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