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Why the Janus Henderson (ASX:JHG) share price is plunging today

Shares in international equities and fixed income fund manager Janus Henderson Group (ASX: JHG) (JANUS/IDR UNRESTR) are down nearly 5% today after the group reported its results for the quarter ending September 30, 2018. Below is a summary of the results with comparisons to the prior corresponding period. All figures in U.S. dollars.

  • Profit of $111.2 million, compared to $140.6 million in prior quarter
  • Revenue of $581.2 million, compared to $592.4 million in prior quarter
  • Total assets under management of US$378.1 billion, up 2% on prior quarter
  • Quarterly dividend of 36 cents per share
  • Adjusted earnings per share of 69 cents for quarter, down 7% on prior quarter
  • Diluted earnings per share of 55 cents, compared to 70 cents in prior quarter
  • Completed $50 million share buyback during the quarter
  • On track to achieve $125 million in cost savings by end of 2018

The group’s revenue fall was primarily driven by lower performance fees that also flowed through to the lower profit and earnings per share. The other black marks were relatively weak (short term) investment performance over the quarter that may have contributed to the fund “flow challenges”.

The market has responded to this disappointment by sending the shares close to a 52-week low today, with the stock down around 22% over the past year.

The group came about after the 2017 merger between Denver-based fixed income manager Janus and international equities specialist Henderson Group, which is headquartered in London.

Some of the thinking behind the merger was that the combined group could extract a lot of “synergies” or cost savings, and the fact that it is on track to pull out $125 million out of the business shows this.

Henderson Janus Group’s share price has also been a victim of the terrible October for international equity markets as it charges revenues as a fixed percentage of fees under management.

Elsewhere in the asset management space international equities manger Macquarie Group Ltd (ASX: MQG) posted a solid result today, with its interim profit lifting 5%.

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