Janus Henderson Group PLC

AUM at US$359.8 Billion as on 2QFY19: Global Active Asset Manager, Janus Henderson Group PLC (ASX: JHG) provides a range of investment solutions such as equities, fixed income, quantitative equities, multi-asset, and alternative asset class strategies. The company recently announced change in directors’ interest where Kevin Dolan and Richard Gillingwater acquired 3,318 ordinary shares at US$1.50 each and 3,920 ordinary shares at US$1.50 each, taking the final holdings to 6,929 shares and 11,755 shares, respectively.

On August 1, 2019, JHG’s share declined over 12% post results update, where total revenue of the company for June ’19 Quarter and six months to June 30, 2019, declined by 9.54% and 10.85%, respectively, as compared to the previous corresponding period.

Q2FY19 Key Highlights: JHG highlighted strong investment performance, with 72% and 80% of assets under management outperforming relevant benchmarks on a three and five-year basis, respectively, as on June 30, 2019. Its Asset Under Management at the end of the period was reported at US$359.8 Bn, which was up 1% as compared to the prior quarter, reflecting positive markets, partially offset by net outflows of US$9.8 Bn. Its second-quarter net income was reported at US$109.4 million and adjusted net income was reported at US$119.7 million. During the period, the company completed US$75 million of share buybacks, and US$94 million remains authorised for buybacks in 2019.
The Board of Directors declared a quarterly dividend of US$0.36 per share, with ex-date, record date and payment date on August 9, 12 and 28 of this year, respectively.

 

JHG’s Income Statement (Source: Company Reports)

What to expect: The company has started gaining market share in US Equities in the US Retail channel. It endeavours in attracting outstanding talent alongside a strong existing team along with fostering a culture of diversity and inclusion.Its strong cash flow generation and balance sheet are supporting ongoing investments in the business to meet evolving client needs.

Stock Recommendation: Janus Henderson’s share generated positive YTD return of 8.60%. Company’s financial performance is synced with the global growth and equity markets, therefore, once the macro-economic concerns cool-off, the company would be able to deliver sustainable value for its shareholders. Its net margin for FY18 stood at 21.5%, better than the industry median of 18.1%, which implies that the company’s bottom line performed well as compared to the peer groups. Moreover, on valuation front, its PE multiple and Price to Cash Flow multiple for TTM stand at 8.570x and 7.3x,lower than the industry median of 12.3x and 8.8x, respectively. Hence, considering the aforesaid facts and current trading level, we recommend a “Hold” rating on the stock at the current market price of $27.930, down 12.197% on August 01, 2019.

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