Sygnia declares interim dividend

Sygnia, the asset manager co-founded by Magda Wierzycka, declared an interim dividend of 87c even as its half-year profit dropped.

Sygnia, the asset manager cofounded by Magda Wierzycka, declared an interim dividend even as its half-year profit dropped.

The Cape Town-headquartered fund manager declared an interim dividend per share of 87c for the six months to endMarch, according to its half-year results published on Monday.

That was 8.8% higher than the 80c a share declared in the previous interim period and came despite a 0.5% drop in after-tax profit, which slipped to R138.4m compared with R139.1m the previous interim period.

Headline earnings per share slipped 0.9% to 91.8c for the period, down from 92.6c the previous half-year.

The drop in profit and headline earnings came even though Sygnia’s assets under management and administration rose 5.9% year on year to R312.7bn as of end-March, while revenue climbed 2.8% to R408.6m.

“Despite the challenging economic backdrop ... the group delivered financial results roughly in line with the comparable prior period,” Sygnia said. “As we look ahead, we remain confident in our ability to grow assets under management by coupling competitive investment performance with low management fees.”

Sygnia said the growth in its assets was thanks to the appreciation of financial market asset prices, which helped counter net outflows of R5.1bn over the sixmonth period.

The JSE all share index rose 21.1% over the half-year to end March while the bourse’s all bond index climbed 9.3% and the rand appreciated 1.3% against the dollar.

Assets under management held on behalf of institutional investors increased to R253.3bn at end-March, from R241.2bn a year prior.

“The ongoing financial success of the group is largely dependent on the growth of assets under management and administration from a mix of institutional and retail clients,” Sygnia said.

“The results are also cyclical, reflecting the performance of the markets and currency.”

Sygnia’s interim results are the last prepared under former CEO David Hufton who resigned at end-April after less than five years in the role. Hufton’s resignation means Wierzycka, whose family trust holds 59.9% of Sygnia, returned as CEO with effect from May 1.

Wierzycka admitted in an interview with Business Day not long after Hufton’s resignation was first announced in February that she “ruffled feathers” after making a surprise return to the company as executive chair in June 2021, a little more than two months after stepping down as Hufton’s co-CEO. At the time her return as executive chair was announced, Hufton had been sole CEO for just nine days.

“Virtually all my wealth is tied up in Sygnia ... and I couldn’t let go,” Wierzycka told Business Day in April. “I tried to let someone else be the custodian of my wealth and I couldn’t let go. It’s not like I’m going to find a replacement for myself.”

Her return also sparked off several other resignations, including that of Duane Naicker, who headed the firm’s umbrella retirement fund for almost seven years, as well as financial director Murad Sirkot. Sygnia also backtracked on the appointment of former Denel CFO Carmen le Grange as Sirkot’s financial director less than two months after naming her in the role apparently due to “personal reasons”.

However, in May Sygnia rehired Niki Giles as financial director. Giles had previously held the same position from October 2015 to February 2017 before moving on to serve as its COO until 2018.

Sygnia shares fell 1.7% to R16.52 as of 4.24pm on Monday.

ASSETS UNDER MANAGEMENT HELD ON BEHALF OF INSTITUTIONAL INVESTORS ROSE TO R253.3BN AT END-MARCH