It's probably only a matter of time before UK-fund manager Henderson Group plc (ASX: HGG) breaks to a record high following its solid first half result.
Shares in Henderson jumped 5% to $5.90 in lunch time trade and it is just two cents shy of its all-time high that it hit last week. This makes Henderson the second best performer on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
It's hard to fault the company's financial performance for the six months to end June with management posting a 29% increase in underlying pre-tax profit to £117.4 million and lifting its interim dividend by 19% to 3.1p a share.
The result is more impressive when translated into Australian dollars given that the Aussie has been on a downtrend against the British currency and is currently 17.4% lower on the cross-rate over the past year.
But the good news doesn't stop there. Henderson's cash levels are higher than what most investors were expecting as the fund manager has made a number of acquisitions including two Perennial funds and US growth manager Geneva Capital Management for around $120 million.
The transactions have helped bolster assets under management by 10% to £82.1 billion in the first half when compared to the same time last year, and the outlay for the deals have not stopped Henderson from undertaking an on-market share buyback worth £25 million ($53.5 million). The buyback will be conducted on both the ASX and London Stock Exchange.
Henderson has surplus capital of £113 million as at June 30, 2015, compared with £44 million at the end of December last year.
Investors will also be pleased to see strong fund performance across its funds, which have driven a 16% increase in net fee income to £296.1 million for the first half.
I suspect Henderson has kicked off a good reporting season for the sector and I am expecting good results from the likes of AMP Limited (ASX: AMP) and Magellan Financial Group Ltd (ASX: MFG).
I think Henderson still looks good value despite its 29% share price rally over the past 12 months given that it is well placed to benefit from a further devaluation in the Australian dollar, and is trading on an undemanding price-earnings multiple of around 15x for 2015-16.
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