Asset management firm Sygnia’s share price jumped almost 10% on Monday, as its shareholders learned they would be receiving fatter profit distributions, with the company upping its final dividend by 55.6% for the year ended 30 September 2022.
The company declared a final dividend of 130 cents per share.
This, together with its interim gross dividend of 80 cents per share, saw the group’s total gross dividends for the year coming in at 210 cents per share.
It said the dividends were declared from income reserves and reported that profit after tax shot up 19.3% to R287.4 million for the period.
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Headline earnings per share (Heps) for the year increased 12.1% to 191.3 cents, while diluted Heps rose 12% to 186.1 cents.
The company said it managed to deliver a healthy set of results despite operating in an environment marked by tough trading conditions. These conditions were, in part, due to factors such as Russia’s war in Ukraine, which contributed to market volatility and global energy price pressures.
It also noted that central banks strengthened their fight to curb stubbornly high inflation, resulting in interest rate hikes that affected markets across the globe.
Sygnia flagged “overaggressive policy tightening”, saying the risk of a global recession remains high.
Nevertheless, said the group, “resilient growth suggests a soft landing is still possible”.
“A recovering underlying global economy, risk-averse current investor positioning, and anchored long-term inflation should form a base from which a recovery is increasingly feasible.”
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Sygnia reported a 3.8% drop in assets under management to R285.1 billion (2021: R296.4 billion).
Revenue was up 9.7% from R737.2 million to R808.9 million, driven by a mix of factors, including “Sygnia’s low-cost strategies and its robust focus on macroeconomic trends that it employed to inform its asset allocation decisions”.
The launch of new funds has also contributed to revenue growth, it said.
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“A great deal of bad news is already priced in, and if inflation declines according to plan, investors will be rewarded with attractive opportunities,” Sygnia noted.
“However, if inflation has become entrenched and second-order effects force the Fed to remain hawkish, any bear market rally is likely to be short-lived.”
At the JSE’s close on Monday, Sygnia’s share price was up 9.83%, at R19 apiece.