Wealth manager Quilter has decided to continue with its dividend proposal and share repurchase programme despite the market turbulence triggered by the Covid-19 pandemic.
The firm reaffirmed the proposals despite reporting a decrease in assets under management and administration (AuMA) as net inflows were offset by negative market performance.
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AuMA at the end of March 2020 reached £95.3bn, a decrease of 8% from £103.6bn in the prior year.
The firm’s Q1 net inflows were £500m, flat versus the previous year.
Quilter CEO Paul Feeney said: “While lower levels of AuMA will have an impact on revenues, the vast majority of our revenues are recurring by nature. Our capital and cash levels are in a strong position, and our Board of Directors therefore continues to recommend approval of the 2019 final dividend at the 2020 AGM.
“We remain in the market to facilitate the first tranche of the buyback from the proceeds of the QLA sale and we are proceeding with the Odd-lot Offer, which shareholders approved at the 2019 AGM.”
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By GlobalDataHowever, Quilter no longer anticipates its 27% operating margin target in 2020 owing to the lower AuMA.
The firm also said that it expects to cut approximately £30m in costs in 2020 utilising lower variable compensation, reduced marketing spend as well as other short-term programmes.
Besides, the firm forecast a slower Q2 as the economic effects of the crisis widen.
