REG - Ashmore Group Plc - Final Results
05/09/2024 07:00
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RNS Number : 9662C Ashmore Group PLC 05 September 2024
Ashmore Group plc
5 September 2024
Results for the year ended 30 June 2024
Ashmore Group plc (Ashmore, the Group), the specialist Emerging Markets asset
manager, today announces its audited results for the year ended 30 June
2024.
- Increasingly diversified business underpins financial performance
- Assets under management (AuM) of US$49.3 billion(1). Positive investment
performance of US$2.1 billion. Lower redemptions drive reduction in net
outflows to US$8.5 billion.
- Adjusted net revenue of £187.8 million, 4% lower YoY reflecting higher
performance fees offset by 10% lower average AuM.
• Net management fees of £160.4 million, 12% lower YoY.
• Performance fees of £22.7 million, significantly higher than prior year
(£5.1 million).
- Adjusted operating costs increased by 22% YoY.
• Higher variable remuneration driven by performance fees, realised seed capital
gains(2) and interest income (31.0% of EBVCT).
- Adjusted EBITDA of £77.9 million, 27% lower YoY, and adjusted EBITDA margin
of 41%.
- Profit before tax increased 15% to £128.1 million, reflecting higher
contribution from seed capital investments (£21.7 million gain) and interest
income (£24.9 million), and £5.2 million realised gain on disposal of
investments.
- Diluted EPS of 13.6 pence, 12% higher than in the prior year. Adjusted diluted
EPS declined by 17% to 10.5 pence.
- Strong and liquid balance sheet with approximately £700 million of capital
resources including £500 million of cash and deposits.
- Final ordinary dividend maintained at 12.1 pence per share, to give total
dividends per share of 16.9 pence.
- Active management delivering medium-term investment outperformance
- Continued positive Emerging Markets index returns of +1% to +13% over the 12
months.
- Approximately 60% of AuM outperforming benchmarks over three and five years.
- Ashmore is well-positioned to capitalise on further Emerging Markets
performance.
- Ashmore continues to diversify in line with its strategic growth objectives
- Equities AuM increased 8% over the year and demand for IG strategies
continues.
- Local asset management platforms continue to grow; AuM +7% YoY to US$7.5
billion.
- EM-domiciled clients represent 37% of Group AuM, an increase from 33% a year
ago.
- Positive outlook, Emerging Markets' resilience and superior growth should
drive capital flows
- Emerging Markets have been resilient to external shocks.
• Effective monetary and fiscal policies.
• Consequently delivering superior economic growth.
- Strong asset class performance.
• Robust fundamentals and valuations present an opportunity.
• Underweight investors need to increase allocations to capture future
performance.
Commenting on the Group's results, Mark Coombs, Chief Executive Officer,
Ashmore Group said:
"Ashmore's diversified business model delivered strong profit growth this year
notwithstanding the impact of lower AuM levels. The Emerging Markets continue
to perform well; for capital flows to respond more powerfully to this positive
backdrop requires near-term uncertainties to be resolved in some investors'
minds. Some of these factors, such as the phasing of the next Fed rate cycle
and the outcome of the US election, will become clear over the coming months.
Therefore, as pent-up demand is unlocked, the pick up in investor interest in
the Emerging Markets should gather momentum through the second half of 2024
and into 2025. Ashmore is delivering investment outperformance for clients and
has a highly-scalable operating platform, which means it is well-positioned to
benefit from capital flows to Emerging Markets as investor risk appetite
increases."
As reported on 12 July 2024, adjusted for US$0.2 billion AuM business
disposal.
1.
Life-to-date basis.
2.
Analysts briefing
There will be a presentation for sell-side analysts at 9.00am on 5 September
2024 at UBS, 5 Broadgate, London, EC2M 2QS. A copy of the presentation will be
made available on the Group's website at ir.ashmoregroup.com.
Contacts
For further information please contact:
Ashmore Group plc
Tom Shippey, Group Finance Director +44 (0)20 3077 6191
Paul Measday, Investor Relations +44 (0)20 3077 6278
FTI Consulting
Neil Doyle +44 (0)7771 978 220
Kit Dunford +44 (0)7717 417 038
CEO review
Emerging Markets are delivering positive investment returns, supported by
resilient economic fundamentals, and Ashmore is delivering outperformance for
clients across a broad range of strategies. This favourable backdrop means the
Group is well-positioned to benefit from higher capital flows to Emerging
Markets as investor risk appetite increases.
Emerging Markets assets have generally performed well over the past year,
supported by attractive valuations, ongoing reforms in many countries,
positive credit rating changes and the delivery of superior economic growth.
As described in the Market review, fixed income indices have outperformed
their developed world counterparts, and while equity returns are positive,
they were held back by weaker performance in China.
Notwithstanding the returns delivered by Emerging Markets in the period,
extending the recovery from significantly oversold levels that began in late
2022, there has not yet been a meaningful shift in investor allocations to
deliver net inflows to the asset classes. This is in contrast to previous
cycles when a prolonged period of strong asset class performance, and
outperformance, has delivered capital flows. The cautious approach by some
investors reflects a combination of a rapid shift from a lengthy period of low
interest rates to more normal levels in response to higher inflation, ongoing
geopolitical issues, and uncertainty with respect to major elections, notably
in the US. Greater clarity around these factors will increase risk appetite
and the Emerging Markets should be beneficiaries of the resultant capital
flows.
Ashmore's investment processes have delivered outperformance for clients
across a broad range of investment themes. Approximately 60% of AuM is
outperforming over three and five years, which includes the challenging market
conditions of late 2021 and early 2022, and the delivery of future performance
is supported by the resilient underlying economic conditions in emerging
countries, together with the attractive valuations and inherent upside
reflected in portfolios. The reduction in outperformance over one year to 40%
is attributable to modest underperformance in a number of local currency
mandates.
A lower level of redemptions means that the Group's net flows improved
compared with the prior year, albeit they remain negative in line with the
industry. Encouragingly, there is increasing evidence of sales momentum
building with client interest in a range of investment strategies, although as
noted above the conversion to actual flows is likely to require continued
improvement in the global macro environment.
From a reported financial perspective, Ashmore has performed satisfactorily
this year as reflected in the 15% increase in profit before tax to £128
million and a 12% rise in diluted EPS to 13.6 pence per share. However, from
an operating perspective, the performance is influenced by the 10% lower level
of average AuM and higher total operating costs. The main contributor to the
increase in total operating costs is a higher VC charge at this point in the
cycle, reflecting the delivery of a meaningful increase in performance fees
and strong balance sheet returns. The resulting adjusted diluted EPS of 10.5
pence per share is 17% lower than in the prior year. The Board has recommended
an unchanged final ordinary dividend per share.
Further progress against long-term strategic objectives
Phase 1
The Emerging Markets allocation opportunity is substantial, as superior
economic growth leads to greater representation in world capital markets and
investors have to reconsider underweight positions. While risk aversion has
continued for longer than in previous cycles, the outlook for capital flows is
supported by a combination of continued performance by Emerging Markets,
heavily underweight allocations, and a moderation of some of the macro factors
that have reduced risk appetite. Ashmore is well-positioned to benefit from an
increase in capital flows over the medium term.
Phase 2
The Group's investment in its equities franchise, through both global and
local operations, has provided meaningful diversification benefits over the
current market cycle. Equities AuM increased by US$0.5 billion over the year
and represents 13% of Group AuM compared with 11% a year ago. The scale of the
equities opportunity for Ashmore is significant.
Another consistent diversification theme is the demand for IG strategies,
notably from investors in Europe and Asia. Ashmore's investment performance is
strong across external debt, corporate debt and blended debt IG strategies,
which supports further growth in this increasingly important asset class.
Phase 3
The performance of local markets, and the behaviour of investors within them,
continues to deliver growth in local AuM. Ashmore's local asset management
platforms increased AuM by US$0.5 billion over the 12 months to US$7.5
billion. There was notably strong growth in Colombia, India and Saudi Arabia,
while the Indonesia asset management industry continues to work through
regulatory changes. Overall, clients domiciled in the Emerging Markets
represent 37% of Group AuM, an increase from 33% a year ago.
Notably, Ashmore launched a single-country equity fund investing in Qatar and
is in the process of establishing additional on the ground capabilities.
Ashmore India launched two domestically-focused equity funds to capitalise on
the exciting opportunities offered by this large and rapidly growing economy.
Established business model is appropriate for the whole market cycle
Ashmore's distinctive business model underpins its ability to deliver
long-term outperformance for clients and to create value for shareholders over
market cycles.
- Investment performance is delivered by more than 100 investment professionals,
with a 'no star' culture sustained by teams operating within IC structures.
- The remuneration philosophy has a significant bias to long-dated equity
awards, which provides a strong alignment of interests between employees and
shareholders, maintains a team-based culture, and delivers low employee
turnover.
- Non-VC operating costs remain well-controlled notwithstanding recent inflation
pressures. The Group therefore delivers a level of profitability over the
market cycle that is relatively high compared with its peer group. For
example, the Group has delivered a 41% adjusted EBITDA margin even after a
meaningful downcycle that has seen AuM fall 50% from US$98 billion to US$49
billion.
- Ashmore's operational architecture is scalable and has significant capacity to
support the expansion of the Group's profit margin with higher AuM levels.
- The balance sheet remains well-capitalised and liquid, with approximately
£700 million of financial resources including more than £500 million of cash
and deposits.
The business model is designed to operate effectively over the market cycle,
and therefore these characteristics will continue to support the delivery of
performance for clients and returns to shareholders as Ashmore executes its
long-term growth strategy.
Regulation
The broad extent of the Group's office network, from Colombia to Tokyo, means
it is accountable to numerous regulators and Ashmore's business model has
adapted well to the significant changes in the regulatory landscape
experienced around the world in recent years. The regulatory requirements of
the asset management industry continue to increase, and Ashmore's business
model will continue to adapt to meet these changing regulations.
Employees
While the past year saw the world continue to return to normal in terms of
monetary policies and working practices, it also faced continued uncertainty
in respect of geopolitical risks and the potential impact of new technologies
on many industries including financial services. I would like to thank all my
colleagues across Ashmore's offices around the world for their commitment,
professionalism and adherence to high standards of conduct that underpin the
Group's delivery of performance for its clients and the creation of long-term
value for shareholders.
Outlook
Emerging Markets are delivering positive investment returns and continue to
have attractive valuations, both in their own right and compared with
Developed Markets. This is supported by a resilient economic performance in
recent years, and an expectation of further superior growth as the emerging
countries continue on a long-term convergence path with the developed world.
Investors that have moderated their risk appetite and reduced allocations to
Emerging Markets have missed out on significant asset class returns over the
past 12 to 18 months. However, at current valuations, with substantially
higher yields available in Emerging Markets than in the developed world, and
equities markets offering improving growth on low earnings multiples, there
remains an attractive opportunity to capture meaningful outperformance over
the coming years.
For capital flows to respond more powerfully to this positive backdrop
requires near-term uncertainties to be resolved in some investors' minds.
While it is difficult to predict the outcome of some of the geopolitical
issues, factors such as the phasing of the next Fed rate cycle and the outcome
of the US election will become clear over the coming months. Therefore, as
this pent-up demand is unlocked, the pick up in investor interest in the
Emerging Markets asset classes should gather momentum through the second half
of 2024 and into 2025. Ashmore is delivering investment outperformance for
clients and has a highly-scalable operating platform, which means it is
well-positioned to benefit from capital flows to Emerging Markets as investor
risk appetite increases.
Mark Coombs
Chief Executive Officer
4 September 2024
Market review
Emerging Markets performed well over the past 12 months, delivering positive
returns that reflect the resilience and growth of the underlying economies.
Fixed income asset classes outperformed developed world equivalents, and
equities delivered strong returns even with the headwinds in China.
External debt
Over the 12 months to 30 June 2024, the EMBI GD delivered a return of +9% and
therefore comfortably outperformed world bonds with the Bloomberg Global
Aggregate index rising by +1% over the period. The principal driver of the
EMBI GD performance was tighter spreads, which reduced from 430bps to 385bps
over US Treasuries. The HY sub-index performed particularly well with a return
of +16% compared with +3% for the IG sub-index.
The external debt market comprises US$1.7 trillion of bonds, of which
three-quarters are in the EMBI GD. The index is highly diversified across 67
countries and with 50% of the bonds rated IG. The index yields 8.4% and
provides myriad attractive investment opportunities, particularly in the
context of lower global interest rates and the potential for further spread
compression back towards the 300bps to 350bps range experienced in the past.
Local currency
The GBI-EM GD returned +1% over the past year, with good performance in rates
markets and positive carry held back by the impact of a stronger US dollar for
much of the period.
It is notable that most of the issuance by Emerging Markets countries is in
their domestic currencies rather than US dollars or other hard currencies. For
example, the total sovereign issuance in local currency is US$19.7 trillion,
more than 10 times the size of the sovereign external debt market, and
provides structural resilience to those countries. However, the index
representation is lower, with only 21% of bonds in the benchmark index due to
strict eligibility criteria including minimum issue size and factors such as
the existence of investment quotas or other forms of capital control.
The asset class continues to benefit from the quality and effectiveness of
policymaking, with many central banks acting early and aggressively to counter
inflationary pressures in recent years, and who are now in a position to ease
monetary policy as inflation falls back towards more normal levels. The still
high level of real yields provides attractive income and support for
currencies, as well as the scope for a prolonged period of policy easing.
Furthermore, the possibility of a weaker US dollar over the medium term could
enhance investor returns in this asset class.
Corporate debt
The CEMBI BD performed well, increasing +9% over the year and delivering
similar returns to the sovereign asset class and US HY bonds (JP Morgan High
Yield Bond Index +11%). Also echoing the sovereign market performance, HY
bonds outperformed IG with returns of +13% and +6%, respectively.
The 12-month default rate at the end of the period was 5.9%, which is higher
than the US and Europe default rates (2.1% and 2.5%, respectively),
principally due to a higher level of defaults in Asia. In emerging Europe and
Latin America, default rates of 2.6% and 1.6%, respectively, are in line with
or lower than the developed world levels.
Similar to sovereign markets, corporate issuance is primarily in local
currencies (US$17.3 trillion) rather than hard currencies (US$2.9 trillion).
Approximately one third of the bonds in issue are in the CEMBI BD benchmark,
which comprises 724 issuers in 59 countries and of which 59% are IG rated.
Corporate debt is therefore a highly diverse asset class that is underpinned
by relatively low net leverage, higher spreads than US issuers with equivalent
credit ratings, and attractive yields in both HY and IG markets.
Equities
The MSCI EM returned +13% over the 12 months, with the performance held back
somewhat by lower returns in China as the authorities seek to reform the
economy and stimulate growth (MSCI EM ex China +18% over the period). Frontier
markets performed well with a 12-month return of +13%.
Emerging Markets equities trade at a meaningful discount to developed world
equities, reflecting in part the performance and valuation of the US stock
market, and illustrated by the MSCI EM trading on a forward PER of 12.3x,
which is a 34% discount to the MSCI World on 18.6x. This valuation discount is
unwarranted given the sound economic backdrop across emerging countries and
the potential for an inflection in earnings given rising GDP and companies
participating in trends such as the demand for technology.
Therefore, investors with underweight allocations risk missing outperformance
as equity valuations benefit from a weaker US dollar and the historical
correlation between relative equity market performance and the GDP growth
premium of Emerging Markets compared with Developed Markets.
Outlook
Many emerging countries have proven resilient to external shocks over the past
few years, as a consequence of pursuing orthodox and effective fiscal and
monetary policies. This has delivered a favourable economic backdrop that
includes higher GDP growth than in developed countries, falling inflation and
relatively high real interest rates, particularly in the less-indebted
countries, providing scope for further rate cuts by Emerging Markets central
banks. Importantly, this resilient and stable performance is being recognised
through positive credit rating changes, and underpins the positive outlook for
each of the main Emerging Markets asset classes.
Notably, large emerging countries such as India and Saudi Arabia are
delivering strong economic and capital markets performance, and the outlook
for China is improving as government stimulus and reforms will address some of
the challenges of the past few years.
In the near term, the outcome of the US election is important for global
capital markets, but whichever candidate or party wins, the current state of
the US economy, with its twin deficits and high indebtedness, provides very
little room for manoeuvre. When combined with the likelihood of lower Fed
interest rates over the medium term, and intervention by other central banks,
the outlook is for further weakness in the US dollar over the medium term from
its recent peak.
Regrettably, geopolitical risk, including war, remains an issue in certain
parts of the world. Rather than following the knee-jerk reaction to sell risk
assets, investors can mitigate the impact of such events through
diversification and allocations to 'neutral' countries, many of which are in
the emerging world rather than the developed world.
In summary, as there becomes greater certainty over the timing and pace of
monetary policy easing by developed countries, with no significant escalation
in geopolitical events, and continued delivery of superior economic
performance by emerging economies, investors' risk appetite should increase
and lead to higher allocations to Emerging Markets. Current valuations across
the Emerging Markets asset classes, including yields that are towards the
upper end of the range seen over the past decade, support this argument and
underpin an expectation of outperformance over the next cycle.
Business review
Reported PBT increased by 15%, with increased performance fees, higher
interest income and seed capital returns compensating for the effect of lower
average AuM. Ashmore's balance sheet remains robust with approximately £700
million of capital resources including more than £500 million of cash and
deposits.
Reconciling items:
£m FY2024 Seed capital (gains)/losses FX translation (gains)/losses FY2024 FY2023
Reported Adjusted Adjusted
Net management fees 160.4 - - 160.4 183.2
Performance fees 22.7 - - 22.7 5.1
Other revenue 3.7 - - 3.7 2.7
Foreign exchange 2.5 - (1.5) 1.0 4.4
Net revenue 189.3 - (1.5) 187.8 195.4
Net losses on investment securities (17.2) 17.2 - - -
Personnel expenses (85.1) - 0.5 (84.6) (65.9)
Other expenses excluding depreciation and amortisation (26.7) 1.4 - (25.3) (23.3)
EBITDA 60.3 18.6 (1.0) 77.9 106.2
EBITDA margin 32% - - 41% 54%
Depreciation and amortisation (3.1) - - (3.1) (3.2)
Operating profit 57.2 18.6 (1.0) 74.8 103.0
Finance income 65.2 (40.3) - 24.9 15.9
Realised gains on disposal of investments 5.2 - - 5.2 -
Share of profit from associates 0.5 - - 0.5 0.5
Profit before tax 128.1 (21.7) (1.0) 105.4 119.4
Diluted EPS (p) 13.6 (3.0) (0.1) 10.5 12.7
Assets under management
AuM declined by US$6.6 billion over the year to US$49.3 billion, driven by net
outflows of US$8.5 billion, partially offset by positive investment
performance of US$2.1 billion. The average AuM level was 10% lower than in the
prior year at US$52.4 billion (FY2023: US$58.2 billion).
Gross subscriptions of US$7.2 billion represent 13% of opening AuM, in line
with the prior year and at a relatively subdued level given continued risk
aversion by some investors (FY2023: US$7.2 billion, 11% of opening AuM).
Subscriptions were strongest in the local currency and equities investment
themes, with the latter seeing new mandate wins notably from the Middle East
and Asia.
Gross redemptions of US$15.7 billion, or 28% of opening AuM (FY2023: US$18.7
billion, 29% of opening AuM) continue to reflect institutional decisions to
reduce Emerging Markets allocations given ongoing macroeconomic uncertainty
and geopolitical tension. This was particularly evident in the fixed income
investment themes, notwithstanding good market performance and delivery of
medium-term outperformance by Ashmore's investment processes. There was a
return of capital from the alternatives theme following the successful
realisation of private equity investments.
As a consequence of lower redemptions, the total net outflow for the period of
US$8.5 billion is 26% lower than in the prior year (FY2023: US$11.5 billion).
Ashmore delivered US$2.1 billion of positive investment performance over the
12 months, broadly spread across the liquid investment themes with the
exception of local currency where a stronger US dollar led to flat performance
overall.
Total AuM in the Group's local offices increased by 7% to US$7.5 billion (30
June 2023: US$7.0 billion) and therefore continued to demonstrate the
diversification benefit of the Group's strategy.
There was notable AuM growth in Colombia with capital raised into a third
private equity fund; in India due to continued strong equity market returns
and fund launches; and in Saudi Arabia as a consequence of market performance
and net fund flows including new mandates. AuM in Indonesia declined due to
profit taking in the equity market and a subdued flow environment as the
economy faced some headwinds from lower levels of Chinese growth.
AuM movements by investment theme
The AuM development by theme is shown in the table below. The 'other' column
includes reclassification of funds between external debt, corporate debt and
blended debt following changes to investment guidelines and benchmarks; and
the 'other' movement in alternatives is due to the sale of the Group's
Colombian real estate business. The local currency investment theme includes
US$7.6 billion of overlay/liquidity funds (30 June 2023: US$6.3 billion).
Investment theme AuM Gross Gross Net flows Performance Other AuM
30 June
subscriptions
redemptions
US$bn
US$bn
US$bn
30 June
2023
US$bn
US$bn
2024
US$bn
US$bn
External debt 11.0 0.7 (2.8) (2.1) 0.7 (2.4) 7.2
Local currency 18.8 3.3 (4.4) (1.1) - - 17.7
Corporate debt 6.5 0.1 (1.7) (1.6) 0.2 (0.4) 4.7
Blended debt 11.9 0.8 (4.6) (3.8) 0.8 2.8 11.7
Fixed income 48.2 4.9 (13.5) (8.6) 1.7 - 41.3
Equities 6.2 2.1 (2.1) - 0.5 - 6.7
Alternatives 1.5 0.2 (0.1) 0.1 (0.1) (0.2) 1.3
Total 55.9 7.2 (15.7) (8.5) 2.1 (0.2) 49.3
The geographic split of the Group's AuM remains diverse and consistent with
recent periods: 38% of AuM is invested in Latin America, 25% in Asia Pacific,
15% in Eastern Europe and 22% in the Middle East and Africa.
Clients
Ashmore's clients are predominantly a diversified set of institutions,
representing 96% of AuM (30 June 2023: 96%), with the remainder sourced
through intermediary retail channels. Segregated accounts represent 82% of AuM
(30 June 2023: 81%).
The mix of clients is broadly stable compared with the prior year, with an
increase in AuM from government-related institutions (central banks, sovereign
wealth funds and other government entities) from 42% to 46%, offset by a
decline in assets managed for pension funds from 23% to 19%. Geographically,
the largest change was an increase in AuM from clients domiciled in the Middle
East and Africa, from 19% to 23%, compared with a modest reduction in each of
the other regions.
Ashmore's principal mutual fund platforms are in Europe and the US, which in
total represent AuM of US$4.0 billion in 45 funds. The European SICAV range
comprises 33 funds with AuM of US$3.5 billion (30 June 2023: US$4.8 billion in
31 funds) and the US 40 Act range has 12 funds with AuM of US$0.5 billion
(30 June 2023: US$0.9 billion in 12 funds).
Investment performance
As of 30 June 2024, 40% of AuM is outperforming over one year, 59% over three
years and 62% over five years (30 June 2023: 67%, 69% and 49%, respectively).
The proportion of AuM outperforming over one year has reduced. This is
principally due to underperformance in some local currency funds, without
which the proportion of AuM outperforming over the 12 months would be similar
to the three and five-year levels. While there is some underperformance in HY
corporate debt strategies, this reflects assets with potentially high recovery
values.
Over the medium to longer term, Ashmore is delivering outperformance in
external debt, local currency bonds, blended debt and a range of equity
strategies, together with IG strategies across the fixed income themes.
Revenues
Net revenue was 4% lower than in the prior year as a consequence of the impact
of lower average AuM on net management fees, mostly offset by higher
performance fees. On an adjusted basis, excluding FX translation effects,
net revenue also fell by 4% to £187.8 million.
Net revenue
FY2024 FY2023
£m
£m
Net management fees 160.4 183.2
Performance fees 22.7 5.1
Other revenue 3.7 2.7
FX: hedges 1.0 4.4
Adjusted net revenue 187.8 195.4
FX: balance sheet translation 1.5 1.0
Net revenue 189.3 196.4
Net management fee income of £160.4 million fell by 12% as a consequence of
10% lower average AuM and the headwind from a higher average GBP:US$ rate. At
constant FY2023 exchange rates, net management fee income reduced by 9%.
The net management fee margin increased slightly to 39 basis points (FY2023:
38 basis points), due to the recognition of one-off fees related to capital
raising by Ashmore Colombia. There was an overall positive impact from
investment theme mix and large mandate flows, offset by competition and other
mix effects.
Performance fees of £22.7 million (FY2023: £5.1 million) were earned in the
year, and delivered by a range of funds in the local currency, corporate debt
and equities investment themes, together with a notable contribution from the
alternatives theme following successful asset realisations. Approximately
US$11 billion of the Group's AuM, or 23% of the total, is eligible to earn
performance fees as of 30 June 2024. The Group continues to expect its diverse
sources of net management fee income to generate the majority of its net
revenues.
Translation of the Group's non-Sterling assets and liabilities, excluding seed
capital, resulted in an unrealised FX gain of £1.5 million (FY2023: £1.0
million gain).
The Group's effective hedging programme and the active management of FX
exposures during the period meant that realised and unrealised hedging
gains of £1.0 million were delivered (FY2023: £4.4 million gain).
Therefore, the Group recognised a total FX gain of £2.5 million in revenues
(FY2023: £5.4 million gain).
Other revenue of £3.7 million was broadly comparable to the prior year
(FY2023: £2.7 million).
The table below summarises the net management fee income, performance fee
income and net management fee margin by investment theme.
Net management fees Performance fees Net management fee margin
Investment theme FY2024 FY2023 FY2024 FY2023 FY2024 FY2023
£m
£m
£m
£m
bps
bps
External debt 18.8 32.5 - - 33 31
Local currency 40.6 43.0 7.4 3.3 29 28
Corporate debt 13.5 16.2 - - 33 30
Blended debt 40.9 46.8 0.1 1.1 37 44
Fixed income 113.8 138.5 7.5 4.4 33 33
Equities 27.8 29.5 0.8 - 55 58
Alternatives 18.8 15.2 14.4 0.7 162 144
Total 160.4 183.2 22.7 5.1 39 38
Operating costs
Total operating costs of £114.9 million (FY2023: £94.0 million) include
£1.4 million of expenses incurred by seeded funds that are required to be
consolidated (FY2023: £1.3 million), as disclosed in note 20. On an adjusted
basis, taking into account the impact of seed capital and the proportion of
the accrual for variable compensation that relates to FX translation gains,
operating costs increased by 22% compared with the prior year. Adjusted
operating costs increased by 24% at constant FY2023 exchange rates.
FY2024 FY2023
£m
£m
Staff costs (32.2) (31.4)
Other operating costs (25.3) (23.3)
Depreciation and amortisation (3.1) (3.2)
Operating costs before VC (60.6) (57.9)
Variable compensation (VC) (52.9) (34.8)
VC accrual on FX gains/losses 0.5 0.3
Adjusted operating costs (113.0) (92.4)
Consolidated funds costs (1.4) (1.3)
Add back VC on FX gains/losses (0.5) (0.3)
Total operating costs (114.9) (94.0)
Staff costs increased by 3% to £32.2 million due to the full period impact of
wage inflation in certain locations, while the average headcount fell by 1%.
Other operating costs increased by 9% to £25.3 million due to a higher level
of professional fees incurred in the current year.
Ashmore accrued charitable donations of £0.6 million (FY2023:
£0.5 million), equivalent to 0.5% of profit before tax.
Variable compensation has been accrued at 31.0% of EBVCT (as defined in the
APMs section) resulting in a charge of £52.9 million. The charge is higher
than in the prior year (FY2023: £34.8 million) to reflect the delivery of
investment outperformance for clients, a meaningful level of performance fees,
the successful realisation of seed capital gains and higher levels of interest
income earned on the Group's cash and deposits.
The combined depreciation and amortisation charges for the period of £3.1
million were similar to the prior year.
Adjusted EBITDA
The impact of the lower revenue base and higher operating costs means that
adjusted EBITDA was 27% lower at £77.9 million (FY2023: £106.2 million),
resulting in a margin of 41% for the year (FY2023: 54%). At constant FY2023
exchange rates, adjusted EBITDA declined by 21%.
Finance income
Net finance income of £70.4 million (FY2023: £33.9 million) includes gains
relating to seed capital investments, which are described in more detail
below, and £5.2 million realised gains on the disposal of the Group's
Colombian real estate business and the partial disposal of a minority interest
in an Indonesian financial services company.
Excluding these items, net interest income for the period of £24.9 million
increased compared with the prior year (FY2023: £15.9 million) due to the
benefit of higher market interest rates on the Group's cash and deposits.
Seed capital
The following table summarises the principal IFRS items in the accounts to
assist in understanding the financial impact of the Group's seed capital
programme on profits. The seed capital investments generated total realised
and unrealised gains of £21.7 million in the year (FY2023: £8.3 million
loss). This comprises a £4.7 million loss in respect of consolidated funds
(FY2023: £15.3 million loss) and a £26.4 million mark-to-market gain in
respect of unconsolidated funds (FY2023: £7.0 million gain).
Impact of seed capital investments on profits
FY2024 FY2023
£m
£m
Consolidated funds (note 20):
Net losses on investment securities (17.2) (25.0)
Operating costs (1.4) (1.3)
Investment income 13.9 11.0
Sub-total: consolidated funds (4.7) (15.3)
Unconsolidated funds (note 8):
Market return 23.5 5.7
FX 2.9 1.3
Sub-total: unconsolidated funds 26.4 7.0
Total seed capital gains/(losses) 21.7 (8.3)
- realised 11.3 2.4
- unrealised 10.4 (10.7)
Profit before tax
Statutory profit before tax was 15% higher at £128.1 million (FY2023: £111.8
million), reflecting lower operating profit more than offset by higher
interest income, gains on seed capital investments and gains on disposal of
investments.
Taxation
The effective tax rate of 23.3% (FY2023: 22.6%) reflects the geographic mix of
the Group's profits in the period, the valuation of deferred tax assets
relating to share-based remuneration and the impact of seed capital gains
and losses. The effective tax rate is higher compared with the prior year
primarily due to a greater proportion of profits generated in jurisdictions
with higher tax rates, such as Colombia and the UK. Note 12 to the financial
statements provides a reconciliation of the tax charge to the UK
corporation tax rate of 25.0%.
The Group's current effective tax rate, based on its geographic mix of profits
and prevailing tax rates, is approximately 21% to 22%.
Earnings per share
Basic EPS for the period increased by 12% to 13.9 pence (FY2023: 12.4 pence)
and diluted EPS also rose by 12% from 12.2 pence to 13.6 pence.
On an adjusted basis, excluding the effects of FX translation,
seed capital-related items and relevant tax, diluted EPS was 17% lower at
10.5 pence (FY2023: 12.7 pence).
Balance sheet
Ashmore's consistent approach is to maintain a strong and liquid balance sheet
over market cycles, supporting the commercial demands of current and
prospective investors, enabling investment in strategic development
opportunities and supporting the Group's dividend policy.
As of 30 June 2024, total equity attributable to shareholders of the parent
was £882.6 million (30 June 2023: £898.8 million). The Group has no debt.
The level of capital required to support the Group's activities, including its
regulatory requirements, is £97.0 million. As of 30 June 2024, the Group had
total capital resources of £696.2 million, equivalent to 98 pence per share,
and therefore representing an excess of £599.2 million over the Board's level
of required capital.
Cash
Ashmore has maintained a strong cash position with more than £500 million of
cash and deposits as of 30 June 2024. Excluding cash held in consolidated
funds, the Group's cash and deposits increased by £37.4 million to £505.7
million (30 June 2023: £468.3 million), reflecting post-tax operating cash
flows, the proceeds from the effective recycling of seed capital investments
and interest income, offset by dividends paid to shareholders. The proportion
of cash held in US dollars increased as US dollar revenues earned were not
sold for Sterling as the GBP:US$ rate strengthened over the period.
Cash and deposits by currency
30 June 30 June
2024
2023
£m
£m
Sterling 241.8 374.0
US dollar 229.8 71.1
Other 40.2 33.5
Total 511.8 478.6
The Group's business model delivers a high conversion rate of operating
profits to cash. Based on operating profit of £57.2 million for the period
(FY2023: £77.4 million), the Group generated £112.5 million of cash from
operations (FY2023: £111.6 million). The operating cash flows after excluding
consolidated funds represent 146% of adjusted EBITDA (FY2023: 105%).
Seed capital investments
Ashmore invests seed capital in its funds to achieve a number of commercial
objectives, including to provide initial scale, to support the development of
an investment track record, and to enhance a fund's position with intermediary
distributors.
The programme has delivered growth in third-party AuM with approximately US$5
billion of current AuM in funds that have been seeded, representing 10% of
total Group AuM.
The diversified mix of seed capital investments means that the underlying fund
portfolios, some of which are consolidated under IFRS 10, have exposure to a
range of Emerging Markets asset classes, including sovereign and corporate
fixed income, listed equities and private equity, and a wide array of
industries including basic materials, education, energy, financials,
healthcare, media, industrials, infrastructure, real estate, transport and
utilities.
During the year, the Group made new investments of £13.7 million and realised
£68.9 million from previous investments. The unrealised mark-to-market gain
on the portfolio was £21.3 million, consistent with the strong returns
described in the Market review. Overall, therefore, the market value of the
Group's seed capital investments reduced to £257.6 million (30 June 2023:
£291.5 million).
Subscriptions in the period were focused on developing new funds in the
alternatives, local currency and equities themes, including facilitating
access to strategies managed by the Group's local offices.
Seed capital recycling in the period was achieved through successful asset
realisations in the alternatives theme and the subsequent return of capital to
investors, and from globally and locally managed funds in the equities
investment theme.
The Group realised a gain of £11.3 million in the period, and the
life-to-date realised gain on the redeemed investments was £16.1 million.
This demonstrates the effective use of the Group's balance sheet in supporting
strategic development and delivering meaningful realised profits to
shareholders.
Seed capital market value by currency
30 June 30 June
2024
2023
£m
£m
US dollar 213.9 240.1
Colombian peso 23.6 19.7
Other 20.1 31.7
Total market value 257.6 291.5
In addition, Ashmore has made seed capital commitments to funds of £7.2
million that were undrawn at the period end, giving a total value for the
Group's seed capital programme of approximately £265 million.
Shares held by the EBT
The EBT purchased £13.8 million of ordinary shares during the period in
anticipation of the vesting of employee share awards. Consequently, as of 30
June 2024, the EBT owned 49,481,410 ordinary shares (30 June 2023: 50,834,683
ordinary shares), representing 6.9% of the Group's issued share capital
(30 June 2023: 7.1%).
Foreign exchange
The majority of the Group's fee income is received in US dollars and it is the
Group's policy to hedge up to two-thirds of the notional value of budgeted
foreign currency-denominated net management fees. Foreign currency assets and
liabilities, including cash, are marked to market at the period end exchange
rate with movements reported in either revenues or other comprehensive income
(OCI).
Movements in the GBP:US$ and other exchange rates over the period reduced net
management fees by 3%, reduced operating costs by 1%, and resulted in a
translation gain in net revenue of £1.5 million on the Group's foreign
currency assets and liabilities and a £2.9 million mark-to-market gain on the
Group's seed capital investments.
Included in OCI is an unrealised FX translation loss on non-Sterling assets
and liabilities of £4.6 million (FY2023: £26.2 million loss), which
primarily comprises FX translation movements on cash, seed capital and the
Group's subsidiaries.
Dividend
The Board's policy is to pay a progressive ordinary dividend over time, taking
into consideration factors such as the financial performance over the period,
the Group's strong financial position, cash generation and the near-term
outlook.
Therefore, the Board has recommended a final dividend of 12.1 pence per share,
which, if approved by shareholders, will be paid on 6 December 2024 to all
shareholders on the register on 8 November 2024.
Tom Shippey
Group Finance Director
4 September 2024
Risk management
In accordance with the Code, the Board is ultimately responsible for the
Group's risk management and internal control systems and for reviewing their
effectiveness. Such systems and their review are designed to manage, rather
than eliminate, the risk of failure to achieve business objectives, and can
provide only reasonable and not absolute assurance against material
misstatement or loss.
Consideration of changes to the Code
The Board notes the changes to the Code issued by the FRC in January 2024,
including the additional requirements relating to risk management and internal
controls that will apply to the Group in FY2027.
Principal and emerging risks, controls and mitigants
The table below summarises those principal risks that the Group has assessed
as being most significant currently, together with examples of associated
controls and mitigants. Reputational and conduct risks are common to most
aspects of Ashmore's strategy and business model.
Ashmore's internal control framework considers the assessment and management
of emerging risks alongside its principal risks. Current examples of emerging
risks considered by the process are:
- the increased risk of recessions due to higher inflation volatility, higher
fiscal deficits and the resulting monetary/fiscal policies;
- an increase in geopolitical risks;
- ESG risks including regulatory and industry focus on potential greenwashing,
legal uncertainty and litigation risks arising from
the industry's differing interpretation of ESG regulation, and the impact of
ESG factors on investors' decisions to invest in Emerging Markets; and
- uncertainty and risks regarding the use of artificial intelligence
technologies in the work environment.
Principal risks and associated controls and mitigants
Description of principal risks Examples of associated controls and mitigants
Strategic and business risks (Responsibility: Board of Directors)
Long-term downturn in Emerging Markets fundamentals/technicals/sentiment, and - Group strategy is reviewed and approved by a board with relevant
impact of broader industry changes (including ESG) on Ashmore's strategy and industry experience
business model
- Diversification of investment capabilities
- Ashmore has a strong balance sheet with no debt
- Governance bodies meet regularly
- The Nominations and Remuneration Committees review diversity data at
least annually
Market capacity issues and increased competition constrain growth - Experienced Emerging Markets investment professionals with deep market
knowledge
- Periodic investment theme capacity reviews
- Emerging Markets asset classes continue to grow, increasing the size of
Ashmore's investable universe
Failure to understand and plan for the potential impact of investor sentiment, - ESG integration framework includes scoring and engagement strategy
climate change and ESG regulations on product preferences and underlying asset
prices (including effects of transition to a low-carbon economy) - Head of Responsible Investment and ESG Policy provides updates to the
Board
- ESGC considers and reports on the risks and opportunities relating to
climate change
Client risks (Responsibility: Product Committee and RCC)
Inappropriate marketing or ESG strategy and/or ineffective management of - Regular Product Committee meetings review product suitability and
existing and potential fund investors and distributors, including impact of appropriateness
net outflows and fee margin pressure
- Experienced distribution team with appropriate geographic coverage
- Investor education to ensure understanding of Ashmore investment themes
and products
- ESGC includes distribution team members
Inadequate client oversight including alignment of interests - Global distribution team appropriately structured for institutional and
intermediary retail clients
- Monitoring of client-related issues including a formal complaint
handling process
- Compliance and legal oversight to ensure clear and fair terms of
business, disclosures and financial promotions
Description of principal risks Examples of associated controls and mitigants
Treasury risks (Responsibility: CEO and GFD)
Inaccurate financial projections impact decision making including hedging of - Defined risk appetite, and risk appetite measures updated quarterly
future cash flows and balance sheet investments
- Group FX and Liquidity Management Committee meets frequently and
regularly
Investment risks (Responsibility: Group ICs)
Downturn in long-term performance - Consistent investment philosophy over more than 30 years and numerous
market cycles, with dedicated Emerging Markets focus including country visits
and network of local offices
Operational risks (Responsibility: Governance bodies)
Inadequate security of information including cyber security and data - Information security and data protection policies, subject to annual
protection review including cyber security review
- Cyber Security Working Group meets regularly
- Employees receive online training and undertake mandatory testing
Failure of IT infrastructure, including inability to support business growth - Appropriate IT policies with annual review cycle
- IT systems and environmental monitoring
- Group IT platform incorporates local offices
Legal action, fraud or breach of contract perpetrated by or against the Group, - Independent Internal Audit function that considers risk of fraud in each
its funds or investments audit
- Anti-money laundering and anti-bribery and corruption policies, also
required for service providers
- Whistleblowing policy including independent reporting line and Board
sponsor
- Due diligence on service providers
- Insurance policies in place with appropriate cover
Insufficient resources, including loss of key employees and inability to - Committee-based investment management reduces key person risk
attract employees, or health & safety issues, hamper growth or the Group's
ability to execute its strategy - Appropriate Remuneration Policy with emphasis on performance-related pay
and long-dated deferral of equity awards
- Regular reviews of resource requirements and updates provided to the
Board
- Annual review of remuneration and benefits including benchmarking
against industry
- Annual Culture and Conduct report to the Board
Lack of understanding and compliance with global and local regulatory - Regulatory Development Steering Group and compliance monitoring
requirements, as well as conflicts of interest and not treating customers programme
fairly, and financial crime, which includes money laundering, bribery and
corruption, leading to high level publicity or regulatory sanction - Compliance standards cover global and local offices
- Anti-money laundering, anti-bribery and corruption, and conflicts of
interest policies
- Conduct and culture risks considered by the Board on a semi-annual basis
- ESGC oversight of regulatory and reporting requirements
- Compliance function manages sanctions restrictions
Inadequate oversight of Ashmore overseas offices - GFD has oversight responsibility for overseas offices. Senior employees
take local board/advisory positions
- Dual reporting lines into local management and Group department heads,
with adherence to applicable Group policies
- Local risk and compliance committees held and RCC receives updates
- Internal Audit reviews
Inappropriate oversight of market, liquidity, credit, counterparty and - Group risk management policies, reviewed regularly
operational risks
- Monthly reviews of market and liquidity risk
- Quarterly reviews of principal risks, counterparties and credit risk
Consolidated statement of comprehensive income
For the year ended 30 June 2024
Notes 2024 2023
£m
£m
Management fees 162.6 185.4
Performance fees 22.7 5.1
Other revenue 3.7 2.7
Total revenue 189.0 193.2
Distribution costs (2.2) (2.2)
Foreign exchange gains 7 2.5 5.4
Net revenue 189.3 196.4
Net losses on investment securities 20 (17.2) (25.0)
Personnel expenses 9 (85.1) (66.2)
Other expenses 11 (29.8) (27.8)
Operating profit 57.2 77.4
Finance income 8 70.4 33.9
Share of profit from associate 26 0.5 0.5
Profit before tax 128.1 111.8
Tax expense 12 (29.9) (25.3)
Profit for the year 98.2 86.5
Other comprehensive income/(loss), net of related tax effect
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences arising on foreign operations (4.6) (26.2)
Cash flow hedge intrinsic value gains - 4.9
Other comprehensive loss, net of tax (4.6) (21.3)
Total comprehensive income for the year 93.6 65.2
Profit attributable to:
Equity holders of the parent 93.7 83.3
Non-controlling interests 4.5 3.2
Profit for the year 98.2 86.5
Total comprehensive income attributable to:
Equity holders of the parent 89.6 62.7
Non-controlling interests 4.0 2.5
Total comprehensive income for the year 93.6 65.2
Earnings per share attributable to equity holders of the parent
Basic 13 13.94p 12.43p
Diluted 13 13.55p 12.15p
Consolidated balance sheet
As at 30 June 2024
Notes 2024 2023
£m
£m
Assets
Non-current assets
Goodwill and intangible assets 15 87.0 86.9
Property, plant and equipment 16 7.3 6.5
Investment in associates 26 2.7 2.3
Financial assets at fair value 19, 20 57.6 54.1
Deferred acquisition costs 0.2 0.3
Deferred tax assets 18 18.9 23.9
173.7 174.0
Current assets
Investment securities 19, 20 200.9 229.9
Financial assets at fair value 19, 20 32.8 55.8
Derivative financial instruments 19, 21 0.2 -
Trade and other receivables 17 60.3 70.4
Cash and deposits 21 511.8 478.6
806.0 834.7
Total assets 979.7 1,008.7
Equity and liabilities
Capital and reserves - attributable to equity holders of the parent
Issued capital 22 0.1 0.1
Share premium 15.6 15.6
Retained earnings 863.3 875.4
Foreign exchange reserve 3.6 7.7
882.6 898.8
Non-controlling interests 31 8.2 14.2
Total equity 890.8 913.0
Liabilities
Non-current liabilities
Lease liabilities 16 4.5 3.7
Deferred tax liabilities 18 8.9 9.3
13.4 13.0
Current liabilities
Lease liabilities 16 1.9 2.1
Derivative financial instruments 19, 21 - 0.2
Third-party interests in consolidated funds 19, 20 39.4 56.2
Trade and other payables 24 34.2 24.2
75.5 82.7
Total liabilities 88.9 95.7
Total equity and liabilities 979.7 1,008.7
Approved by the Board on 4 September 2024 and signed on its behalf by:
Mark Coombs Tom Shippey
Chief Executive Officer Group Finance Director
Consolidated statement of changes in equity
For the year ended 30 June 2024
Attributable to equity holders of the parent
Issued capital £m Share premium Retained earnings Foreign exchange reserve Cash flow hedging reserve Total Non-controlling interests Total
£m
£m
£m
£m
£m
£m
equity
£m
Balance at 30 June 2022 0.1 15.6 901.0 33.2 (4.9) 945.0 21.8 966.8
Profit for the year - - 83.3 - - 83.3 3.2 86.5
Other comprehensive income/(loss):
Foreign currency translation differences arising on foreign operations - - - (25.5) - (25.5) (0.7) (26.2)
Cash flow hedge intrinsic value gains - - - - 4.9 4.9 - 4.9
Total comprehensive income/(loss) - - 83.3 (25.5) 4.9 62.7 2.5 65.2
Transactions with owners:
Purchase of own shares - - (15.6) - - (15.6) - (15.6)
Share-based payments - - 18.5 - - 18.5 - 18.5
Movements in non-controlling interests - - 6.6 - - 6.6 (6.8) (0.2)
Dividends to equity holders - - (118.4) - - (118.4) - (118.4)
Dividends to non-controlling interests - - - - - - (3.3) (3.3)
Total transactions with owners - - (108.9) - - (108.9) (10.1) (119.0)
Balance at 30 June 2023 0.1 15.6 875.4 7.7 - 898.8 14.2 913.0
Profit for the year - - 93.7 - - 93.7 4.5 98.2
Other comprehensive income/(loss):
Foreign currency translation differences arising on foreign operations - - - (4.1) - (4.1) (0.5) (4.6)
Total comprehensive income/(loss) - - 93.7 (4.1) - 89.6 4.0 93.6
Transactions with owners:
Purchase of own shares - - (13.8) - - (13.8) - (13.8)
Share-based payments - - 27.9 - - 27.9 - 27.9
Movements in non-controlling interests - - - - - - (5.5) (5.5)
Dividends to equity holders - - (119.9) - - (119.9) - (119.9)
Dividends to non-controlling interests - - - - - - (4.5) (4.5)
Total transactions with owners - - (105.8) - - (105.8) (10.0) (115.8)
Balance at 30 June 2024 0.1 15.6 863.3 3.6 - 882.6 8.2 890.8
Consolidated cash flow statement
For the year ended 30 June 2024
2024 2023
£m
£m
Operating activities
Profit for the year 98.2 86.5
Adjustments for non-cash items:
Depreciation and amortisation 3.1 3.2
Share-based payments 28.0 18.9
Foreign exchange gains (2.5) (5.4)
Net losses on investment securities 17.2 25.0
Finance income (70.4) (33.9)
Tax expense 29.9 25.3
Share of profits from associate (0.5) (0.5)
Cash generated from operations before working capital changes 103.0 119.1
Changes in working capital:
Decrease/(increase) in trade and other receivables (0.1) 9.7
Increase in derivative financial instruments (0.4) (5.0)
Increase/(decrease) in trade and other payables 10.0 (12.2)
Cash generated from operations 112.5 111.6
Taxes paid (23.4) (7.1)
Net cash generated from operating activities 89.1 104.5
Investing activities
Interest received 21.2 15.2
Investment income received 19.8 16.0
Investment in term deposits (203.8) -
Purchase of non-current financial assets measured at fair value (4.0) (19.5)
Purchase of financial assets measured at fair value (10.4) (23.0)
Purchase of investment securities (8.0) -
Sale of non-current financial assets measured at fair value 20.2 5.0
Sale of financial assets measured at fair value 34.8 -
Sale of investment securities 28.3 3.2
Cash movement on funds and subsidiaries no longer consolidated (5.7) (1.7)
Purchase of property, plant and equipment (0.8) (0.4)
Net cash used in investing activities (108.4) (5.2)
Financing activities
Dividends paid to equity holders (119.9) (118.4)
Dividends paid to non-controlling interests (4.5) (3.3)
Third-party subscriptions into consolidated funds 4.7 2.8
Third-party redemptions from consolidated funds (7.8) (29.1)
Distributions paid by consolidated funds (7.4) (4.2)
Decrease of non-controlling interests - (0.4)
Payment of lease liabilities (2.2) (2.2)
Interest paid (0.3) (0.3)
Purchase of own shares (13.8) (15.6)
Net cash used in financing activities (151.2) (170.7)
Net decrease in cash and cash equivalents (170.5) (71.4)
Cash and cash equivalents at beginning of year 478.6 552.0
Effect of exchange rate changes on cash and cash equivalents (0.1) (2.0)
Cash and cash equivalents at end of year (note 21) 308.0 478.6
Cash and deposits at end of year comprise the following:
Cash at bank and in hand 53.5 40.9
Daily dealing liquidity funds 213.2 56.8
Short-term deposits 41.3 380.9
Cash and cash equivalents 308.0 478.6
Term deposits 203.8 -
Cash and deposits (note 21) 511.8 478.6
Company balance sheet
As at 30 June 2024
Notes 2024 2023
£m
£m
Assets
Non-current assets
Goodwill 15 4.1 4.1
Property, plant and equipment 16 2.6 4.1
Investment in subsidiaries 25 19.9 19.9
Deferred acquisition costs 0.2 0.3
Trade and other receivables 17 196.3 167.8
Deferred tax assets 18 11.4 11.6
234.5 207.8
Current assets
Trade and other receivables 17 165.7 116.6
Derivative financial instruments 21 0.1 0.2
Cash and deposits 21 222.1 327.7
387.9 444.5
Total assets 622.4 652.3
Equity and liabilities
Capital and reserves
Issued capital 22 0.1 0.1
Share premium 15.6 15.6
Retained earnings 580.9 605.2
Total equity attributable to equity holders of the Company 596.6 620.9
Liabilities
Non-current liabilities
Lease liability 16 1.0 2.2
Current liabilities
Lease liability 16 1.2 1.2
Trade and other payables 24 23.6 28.0
24.8 29.2
Total liabilities 25.8 31.4
Total equity and liabilities 622.4 652.3
The Company has taken the exemption under section 408 of the Companies Act
2006 not to present its profit and loss account and related notes. The
Company's profit for the year ended 30 June 2024 was £81.5 million (30 June
2023: £120.1 million).
The financial statements of Ashmore Group plc (registered number 03675683)
were approved by the Board on 4 September 2024 and signed on its behalf by:
Mark Coombs Tom Shippey
Chief Executive Officer Group Finance Director
Company statement of changes in equity
For the year ended 30 June 2024
Issued Share Retained earnings Cash flow hedging Total equity attributable to equity holders of the parent
capital
premium
£m
reserve
£m
£m
£m
£m
Balance at 30 June 2022 0.1 15.6 600.6 (4.9) 611.4
Profit for the year - - 120.1 - 120.1
Cash flow hedge intrinsic value losses - - - 4.9 4.9
Purchase of own shares - - (15.6) - (15.6)
Share-based payments - - 18.5 - 18.5
Dividends to equity holders - - (118.4) - (118.4)
Balance at 30 June 2023 0.1 15.6 605.2 - 620.9
Profit for the year - - 81.5 - 81.5
Purchase of own shares - - (13.8) - (13.8)
Share-based payments - - 27.9 - 27.9
Dividends to equity holders - - (119.9) - (119.9)
Balance at 30 June 2024 0.1 15.6 580.9 - 596.6
Company cash flow statement
For the year ended 30 June 2024
2024 2023
£m
£m
Operating activities
Profit for the year 81.5 120.1
Adjustments for:
Depreciation and amortisation 1.8 1.8
Share-based payments 20.2 13.7
Foreign exchange losses/(gains) (2.6) 9.6
Finance income (15.6) (10.0)
Tax expense 7.2 9.8
Dividends received from subsidiaries (99.6) (145.2)
Cash used in operations before working capital changes (7.1) (0.2)
Changes in working capital:
Decrease/(increase) in trade and other receivables (7.2) 57.8
Decrease/(increase) in derivative financial instruments 0.1 (5.4)
Decrease in trade and other payables (5.9) (15.5)
Cash generated from/(used in) operations (20.1) 36.7
Taxes paid (12.0) (6.3)
Net cash generated from/(used in) operating activities (32.1) 30.4
Investing activities
Interest received 12.4 8.9
Investment in term deposits (202.0) -
Loans advanced to subsidiaries (78.3) (27.3)
Loans repaid by subsidiaries 25.0 137.8
Dividends received from subsidiaries 99.6 145.2
Purchase of property, plant and equipment (0.2) (0.3)
Net cash generated from/(used in) investing activities (143.5) 264.3
Financing activities
Dividends paid (119.9) (118.4)
Payment of lease liability (1.2) (1.2)
Interest paid (0.1) (0.1)
Purchase of own shares (13.8) (15.6)
Net cash used in financing activities (135.0) (135.3)
Net increase/(decrease) in cash and cash equivalents (310.6) 159.4
Cash and cash equivalents at beginning of year 327.7 159.7
Effect of exchange rate changes on cash and cash equivalents 3.0 8.6
Cash and cash equivalents at end of year (note 21) 20.1 327.7
Cash and deposits at end of year comprise the following:
Cash at bank and in hand 9.0 2.9
Daily dealing liquidity funds 11.1 0.8
Short-term deposits - 324.0
Cash and cash equivalents 20.1 327.7
Term deposits 202.0 -
Cash and deposits (note 21) 222.1 327.7
Notes to the financial statements
1) General information
Ashmore Group plc (the Company) is a public limited company listed on the
London Stock Exchange and incorporated and domiciled in the United Kingdom.
The consolidated financial statements for the year to 30 June 2024 comprise
the financial statements of the Company and its consolidated subsidiaries
(together the Group). The principal activity of the Group is described in the
Directors' report.
2) Basis of preparation
The Group and Company financial statements for the year ended 30 June 2024
have been prepared in accordance with UK-adopted international accounting
standards.
The financial statements have been prepared on a going concern basis under the
historical cost convention, except for the measurement at fair value of
derivative financial instruments and financial assets and liabilities that are
held at fair value through profit or loss.
The Company has taken advantage of the exemption in section 408 of the
Companies Act 2006 that allows it not to present its individual statement of
comprehensive income and related notes.
Going concern
The Board of Directors has considered the resilience of the Group, taking into
account its current financial position, and the principal and emerging risks
facing the business in the context of the current economic outlook. The Board
reviewed cash flow forecasts for a period of 12 months from the date of
approval of these financial statements which indicate that the Group will have
sufficient funds to meet its liabilities as they fall due for that period. The
Board applied stressed scenarios, including severe but plausible downside
assumptions on AuM, profitability of the Group and known commitments. While
there are wider market uncertainties that may impact the Group, the stressed
scenarios, which assumed a significant reduction in revenue for the entire
forecast period, show that the Group and Company would continue to meet their
liabilities as they fall due for a period of 12 months from the date of
approval of the annual financial statements. The financial statements have
therefore been prepared on a going concern basis.
Principal estimates and judgements
The preparation of the financial statements in conformity with UK-adopted
international accounting standards requires the use of certain accounting
estimates, and management to exercise its judgement in the process of applying
the Group's accounting policies. The estimates and judgements used in
preparing the financial statements are periodically evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
In preparing the financial statements, the key source of estimation
uncertainty at the reporting date results from the Group's valuation of level
3 financial assets and liabilities using unobservable inputs (note 19). Other
areas where estimates are made include the assessment of performance
conditions attached to certain executive share awards (note 10) and deferred
tax assets (note 18).
The key accounting judgement is the assessment of whether certain funds with
seed capital investments are controlled by the Group and therefore need to be
consolidated into the financial statements (note 20). Other areas of judgement
include the impairment review of goodwill (note 15) and the measurement of
lease assets and liabilities (note 16).
Climate risks have been considered in the preparation of the financial
statements, principally through the valuation of financial assets. It has been
assessed that climate risks did not have a material impact on the financial
reporting judgements and estimates in the current year.
3) New and amended Standards and Interpretations
The Group and Company adopted Disclosure of Accounting Policies (Amendments to
IAS 1 and IFRS Practice Statement 2) from 1 July 2023. The new Standard did
not have a material impact on the Group's accounting policies, but requires
disclosure of its material accounting policy information instead of its
significant accounting policies.
No other Standards or Interpretations have been issued that are expected to
have a material impact on the Group's financial statements.
4) Material accounting policy information
The following material accounting policies have been applied consistently
where applicable to all years presented in dealing with items considered
material in relation to the Group and Company financial statements, unless
otherwise stated.
Basis of consolidation
The consolidated financial statements of the Group comprise the financial
statements of the Company and its subsidiaries. This includes an Employee
Benefit Trust (EBT) established for the employee share-based awards and
consolidated investment funds.
References to profit or loss in the notes to the financial statements has the
same meaning as the statement of comprehensive income.
Interests in subsidiaries
Subsidiaries are entities, including investment funds, over which the Group
has control as defined by IFRS 10. The Group has control if it is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity. The
results of subsidiaries are included in the consolidated financial statements
from the date on which control commences until the date when control ceases.
The Group reassesses whether or not it controls an entity if facts and
circumstances indicate that there are changes to one or more of the elements
of control.
The profit or loss and each component of other comprehensive income are
attributed to the equity holders of the Company and to any non-controlling
interests. Based on their nature, the interests of third parties in
consolidated funds are classified as liabilities and appear as 'Third-party
interests in consolidated funds' on the Group's balance sheet.
A change in the ownership interest of a consolidated entity that does not
result in a loss of control by the Group is accounted
for as an equity transaction. If the Group loses control over a consolidated
entity, it derecognises the related assets, goodwill, liabilities,
non-controlling interest and other components of equity, and any gain or loss
is recognised in consolidated profit or loss. Any investment retained is
recognised at its fair value at the date of loss of control.
Interests in associates
Associates are partly owned entities over which the Group has significant
influence but not control.
Investments in associates are measured using the equity method of accounting.
Under this method, the investments are initially recognised at cost,
including attributable goodwill, and are adjusted thereafter for the
post-acquisition changes in the Group's share of net assets. The Group's
attributable results of associates are recognised in the consolidated profit
or loss.
Interests in consolidated structured entities
The Group acts as fund manager to investment funds that are considered to be
structured entities. Structured entities are entities that have been designed
so that voting or similar rights are not the dominant factor in deciding which
party has control: for example, when any voting rights relate to
administrative tasks only and the relevant activities of the entity are
directed by means of contractual arrangements. The Group's assets under
management are managed within structured entities. These structured entities
typically consist of unitised vehicles such as Société d'Investissement à
Capital Variable (SICAVs), limited partnerships, unit trusts and open-ended
and closed-ended vehicles which entitle third-party investors to a percentage
of the vehicle's net asset value.
The Group has interests in structured entities as a result of the management
of assets on behalf of its clients. Where the Group holds a direct interest in
a closed-ended fund, private equity fund or open-ended pooled fund such as a
SICAV, the interest is accounted for either as a consolidated structured
entity or as a financial asset, depending on whether the Group has control
over the fund or not. Control is determined in accordance with IFRS 10, based
on an assessment of the level of power and aggregate economic interest that
the Group has over the fund, relative to third-party investors. Power is
normally conveyed to the Group through the existence of an investment
management agreement and/or other contractual arrangements. Aggregate economic
interest is a measure of the Group's exposure to variable returns in the fund
through a combination of direct interest, expected share of performance fees,
expected management fees, fair value gains or losses, and distributions
receivable from the fund.
The Group concludes that it acts as a principal when the power it has over the
fund is deemed to be exercised for self-benefit, considering the level of
aggregate economic exposure in the fund and the assessed strength of
third-party investors' 'kick-out' rights (to remove the Group as investment
manager). The Group concludes that it acts as an agent when the power it has
over the fund is deemed to be exercised for the benefit of third-party
investors.
If the Group concludes that it acts as a principal, it is deemed to have
control and, therefore, will consolidate a fund as if it were a subsidiary. If
the Group concludes that it does not have control over the fund, the Group
recognises and measures its interest in the fund as a financial asset.
Interests in unconsolidated structured entities
The Group classifies the following investment funds as unconsolidated
structured entities:
- Segregated mandates and pooled funds managed where the Group does not hold any
direct interest. In this case, the Group considers that its aggregate economic
exposure is insignificant and, in relation to segregated mandates, the
third-party investor has the practical ability to remove the Group from acting
as fund manager, without cause. As a result, the Group concludes that it acts
as an agent for third-party investors.
- Pooled funds managed by the Group where the Group holds a direct interest, for
example seed capital investments, and the Group's aggregate economic exposure
in the fund relative to third-party investors is less than the threshold
established by the Group for determining agent versus principal
classification. As a result, the Group concludes that it is an agent for
third-party investors and, therefore, will account for its beneficial interest
in the fund as a financial asset.
The disclosure of the AuM in respect to consolidated and unconsolidated
structured entities is provided in note 27.
Foreign currency
The Group's financial statements are presented in Pounds Sterling (Sterling),
which is also the Company's functional and presentation currency. Items
included in the financial statements of each of the Group's entities are
measured using the functional currency, which is the currency that prevails in
the primary economic environment in which the entity operates.
Foreign currency transactions
Transactions in foreign currencies are translated into the respective
functional currencies of the Group entities at the spot exchange rates at the
date of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated into the functional currency at the spot
exchange rate at that date. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
Foreign currency differences arising on translation are recognised in profit
or loss, except for qualifying cash flow hedges to the extent that the hedge
is effective, in which case foreign currency differences arising are
recognised in other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated into Sterling at
the spot exchange rates at the balance sheet date. The revenues and expenses
of foreign operations are translated into Sterling at rates approximating to
the foreign exchange rates ruling at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and
accumulated in the foreign currency translation reserve, except to the extent
that the translation difference is allocated to non-controlling interests.
When a foreign operation is disposed of such that control is lost, the
cumulative amount in the foreign currency translation reserve related to that
foreign operation is reclassified to profit or loss as part of the gain or
loss on disposal. If the Group disposes of only part of its interest in a
subsidiary that includes a foreign operation while retaining control, the
relevant proportion of the cumulative amount is reattributed to
non-controlling interests.
If the settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign
currency differences arising on the item form part of the net investment in
the foreign operation and are recognised in other comprehensive income, and
accumulated in the foreign currency translation reserve within equity.
Business combinations
Business combinations are accounted for using the acquisition method as at the
acquisition date. The acquisition date is the date on which the acquirer
effectively obtains control of the acquiree.
The consideration transferred for the acquisition is generally measured at the
acquisition date fair value, as are the identifiable net assets acquired,
liabilities incurred (including any asset or liability resulting from a
contingent consideration arrangement) and equity instruments issued by the
Group in exchange for control of the acquiree.
Acquisition-related costs are expensed as incurred, except if they are related
to the issue of debt or equity securities.
Goodwill
The cost of a business combination in excess of the fair value of net
identifiable assets or liabilities acquired, including intangible assets
identified, is recognised as goodwill and stated at cost less any accumulated
impairment losses. Goodwill has an indefinite useful life, is not subject to
amortisation and is tested at least annually for impairment or when there is
an indication of impairment.
Intangible assets
The cost of intangible assets, such as management contracts and brand names,
acquired as part of a business combination is their fair value as at the date
of acquisition. The fair value at the date of acquisition is calculated using
the discounted cash flow methodology and represents the valuation of the
profits expected to be earned from the management contracts and brand name in
place at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and impairment losses. Intangible assets with finite
life are amortised on a systematic basis over their useful lives. The useful
life of an intangible asset which has arisen from contractual or other legal
rights does not exceed the period of the contractual or other legal rights.
Non-controlling interests (NCI)
The Group recognises NCI in an acquired entity either at fair value or at the
NCI's proportionate share of the acquired entity's net identifiable assets.
This decision is made on an acquisition-by-acquisition basis. Changes to the
Group's interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Cost is determined on the basis of the direct and
indirect costs that are directly attributable. Property, plant and equipment
are depreciated using the straight-line method over the estimated useful
lives, assessed to be five years for office equipment and four years for IT
equipment. The residual values and useful lives of assets are reviewed at
least annually.
The Group's property, plant and equipment include right-of use assets
recognised on lease arrangements in accordance with IFRS 16 Leases.
Leases
The Group's lease arrangements primarily consist of leases relating to office
space. Obligations are recognised as lease liabilities and rights under lease
agreements are recognised and classified within property, plant and equipment
on the Group's consolidated balance sheet in accordance with IFRS 16.
The Group initially records a lease liability reflecting the present value of
the future contractual cash flows to be made over the lease term, discounted
using the rate implicit in the lease, being the rate that the lessee would
have to pay to borrow the funds necessary to obtain an asset of similar value
to the right-of-use asset in a similar economic environment with similar
terms, security and conditions. Where this rate is not readily available,
the Group applies the incremental borrowing rate applicable for each lease
arrangement. A right-of-use asset is also recorded at the value of the lease
liability plus any directly related costs and estimated dilapidation expenses
and is presented within property, plant and equipment. Interest is accrued on
the lease liability using the effective interest rate method to give a
constant rate of return over the life of the lease whilst the balance is
reduced as lease payments are made. The right-of-use asset is depreciated over
the life of the lease as the benefit of the lease is consumed.
After the commencement date, the Group reassesses the lease term if there is a
significant event or change in circumstances that is within its control and
affects the likelihood that it will exercise (or not exercise) a term
extension option.
The cost of short-term (less than 12 months) leases is expensed on a
straight-line basis over the lease term.
Deferred acquisition costs
Costs that are directly attributable to securing an investment management
contract are deferred if they can be identified separately and measured
reliably and it is probable that they will be recovered. Deferred acquisition
costs represent the incremental costs incurred by the Group to acquire an
investment management contract, typically on a closed-ended fund. The Group
amortises the deferred acquisition asset recognised on a systematic basis, in
line with the revenue generated from providing the investment management
services over the life of the fund.
Financial instruments
Recognition and initial measurement
Financial instruments are recognised when the Group becomes party to the
contractual provisions of an instrument, initially at fair value plus or minus
transaction costs, except for financial assets classified at FVTPL.
Transaction costs for financial instruments at FVTPL are expensed. Purchases
or sales of financial assets are recognised on the trade date, being the date
that the Group commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from
the investments have expired or been transferred or when the Group has
transferred substantially all risks and rewards of ownership. Financial
liabilities are derecognised when the obligation under the liability has been
discharged, cancelled or expires.
Subsequent measurement
The subsequent measurement of financial instruments depends on their
classification in accordance with IFRS 9 Financial Instruments.
Under IFRS 9, the Group classifies its financial assets into two measurement
categories: amortised cost and fair value through profit or loss. The
classification of financial assets under IFRS 9 is generally based on the
business model in which a financial asset is managed and its contractual cash
flow characteristics. A financial asset is measured at amortised cost if it
meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to
collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
All financial assets not classified as measured at amortised cost are measured
at FVTPL. The Group classifies its financial liabilities at amortised cost
except for derivative liabilities that are classified at FVTPL.
Amortised cost is the amount at which the financial asset or financial
liability is measured at initial recognition minus the principal repayments,
plus or minus the cumulative amortisation using the effective interest method
of any difference between that initial amount and the maturity amount and, for
financial assets, adjusted for any loss allowance.
Financial assets
The Group classifies its financial assets into the following categories:
investment securities at FVTPL, financial assets at FVTPL and financial assets
measured at amortised cost.
Investment securities at FVTPL
Investment securities represent securities, other than derivatives, held by
consolidated funds. These securities are measured at fair value with gains and
losses recognised in profit or loss within finance income or expense.
Financial assets at FVTPL
Financial assets at FVTPL include certain readily realisable interests in
seeded funds, non-current financial assets measured at fair value and
derivatives. From the date the financial asset is recognised, all subsequent
changes in fair value, foreign exchange differences, interest and dividends
are recognised in the profit or loss within finance income or expense.
(i) Non-current financial assets measured at fair value
Non-current financial assets include the Group's interests in funds that are
expected to be realised within a period longer than 12 months from the balance
sheet date. They are held at fair value with changes in fair value being
recognised in profit or loss within finance income or expense.
(ii) Current financial assets measured at fair value
The Group classifies readily realisable interests in seeded funds as current
financial assets measured at FVTPL with fair value changes recognised in
profit or loss within finance income or expense. Fair value is measured based
on the proportionate net asset value in the fund.
(iii) Derivatives
Derivatives include foreign exchange forward contracts and options used by the
Group to manage its foreign currency exposures and those held in consolidated
funds. Derivatives are initially recognised at fair value on the date on which
a derivative contract is entered into and subsequently remeasured at fair
value. Transaction costs are recognised immediately in profit or loss. All
derivatives are carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are
recognised in profit or loss within foreign exchange gains or losses and net
gains or losses on investment securities, except for the effective portion of
cash flow hedges, which is recognised in other comprehensive income.
Financial assets measured at amortised cost
(i) Trade and other receivables
Trade and other receivables are initially recorded at fair value plus
transaction costs. The fair value on acquisition is normally the cost.
Subsequent to initial recognition these assets are measured at amortised cost
less impairment loss allowances. Impairment losses are recognised in profit or
loss within other expenses, for expected credit losses, and changes in those
expected credit losses over the life of the instrument. Loss allowances are
calculated based on lifetime expected credit losses at each reporting date.
(ii) Cash and cash equivalents
Cash represents cash at bank and in hand. Cash equivalents comprise short-term
deposits with contractual maturities of less than three months and units in
money market funds held for the purposes of meeting short‑term cash
commitments. Cash equivalents are readily convertible to known amounts of cash
and are subject to insignificant risk of changes in value.
(iii) Term deposits
Term deposits are fixed term interest-yielding cash investments with
contractual maturities of greater than three months.
Financial liabilities
The Group classifies its financial liabilities into the following categories:
financial liabilities at FVTPL and financial liabilities at amortised cost.
Financial liabilities at FVTPL
Financial liabilities at FVTPL include derivative financial instruments and
third-party interests in consolidated funds. They are carried at fair value
with gains or losses recognised in profit or loss within finance income
or expense.
Financial liabilities at amortised cost
Other financial liabilities including trade and other payables are
subsequently measured at amortised cost using the effective interest rate
method. Interest expense is recognised in profit or loss within finance income
or expense using the effective interest method, which allocates interest at a
constant rate of return over the expected life of the financial instrument
based on the estimated future cash flows.
Fair value of financial instruments
Fair value is defined as the price that would be received to sell an asset or
paid to transfer a liability (i.e. the 'exit price') in an orderly transaction
between market participants at the measurement date. In determining fair
value, the Group uses various valuation approaches and establishes a hierarchy
for inputs used in measuring fair value that maximises the use of relevant
observable inputs and minimises the use of unobservable inputs by requiring
that the most observable inputs be used when available. Observable inputs are
inputs that market participants would use in pricing the asset or liability
developed based on market data obtained from sources independent of the Group.
Unobservable inputs are inputs that reflect the Group's judgements about the
assumptions other market participants would use in pricing the asset or
liability, developed based on the best information available in the
circumstances.
Securities listed on a recognised stock exchange, or dealt on any other
regulated market that operates regularly, is recognised and open to the
public, are valued at the last known available closing bid price. If a
security is traded on several actively traded and organised financial markets,
the valuation is made on the basis of the last known bid price on the main
market on which the securities are traded. In the case of securities for which
trading on an actively traded and organised financial market is not
significant, but which are bought and sold on a secondary market with
regulated trading among security dealers (with the effect that the price is
set on a market basis), the valuation may be based on this secondary market.
Where instruments are not listed on any stock exchange or not traded on any
regulated markets, valuation techniques are used. The methodology and models
used to determine fair value are created in accordance with International
Private Equity and Venture Capital Valuation Guidelines. The Group has a
separate PMVC to review the valuation methodologies, inputs and assumptions
used to value individual investments. Smaller investments may be valued
directly by the PMVC but material investments are valued by independent
third-party valuation specialists.
These techniques include the market approach, the income approach or the cost
approach. The use of the market approach generally consists of using
comparable market transactions or using techniques based on market observable
inputs, while the use of the income approach generally consists of the net
present value of estimated future cash flows, adjusted as deemed appropriate
for liquidity, credit, market and/or other risk factors.
Investments in funds are valued on the basis of the last available net asset
value of the units or shares of such funds.
The fair value of the derivatives is their valuation at the balance sheet
date.
Hedge accounting
The Group applies the general hedge accounting model in IFRS 9. This requires
the Group to ensure that hedge accounting relationships are aligned with its
risk management objectives and strategy and to apply a more qualitative and
forward-looking approach to assessing hedge effectiveness.
The Group uses forward and option contracts to hedge the variability in cash
flows arising from changes in foreign exchange rates relating to management
fee revenues. The Group designates only the change in fair value of the spot
element of the forward and option contracts in cash flow hedging
relationships. The effective portion of changes in fair value of hedging
instruments is accumulated in a cash flow hedge reserve as a separate
component of equity.
The Group applies cash flow hedge accounting when the transaction meets the
specified hedge accounting criteria. To qualify, the following conditions
must be met:
- formal documentation of the relationship between the hedging instrument(s) and
hedged item(s) must exist at inception;
- the hedged cash flows must be highly probable and must present an exposure to
variations in cash flows that could ultimately affect profit or loss;
- the effectiveness of the hedge can be reliably measured; and
- the hedge must be highly effective, with effectiveness assessed on an ongoing
basis.
For qualifying cash flow hedges, the change in fair value of the effective
hedging instrument is initially recognised in other comprehensive income and
is released to profit or loss in the same period during which the relevant
financial asset or liability affects the Group's results.
Where the hedge is highly effective overall, any ineffective portion of the
hedge is immediately recognised in profit or loss within foreign exchange
gain/(loss). Where the instrument ceases to be highly effective as a hedge, or
is sold, terminated or exercised, hedge accounting is discontinued.
Impairment of financial assets
Under IFRS 9, impairment losses on the Group's financial assets at amortised
cost are measured using an expected credit loss (ECL) model. Under this model,
the Group is required to account for expected credit losses, and changes in
those expected credit losses, over the life of the instrument. The amount of
expected credit losses is updated at each reporting date to reflect changes in
credit risk since initial recognition and, consequently, more timely
information is provided about expected credit losses.
The Group applies the simplified approach to calculate expected credit losses
for financial assets measured at amortised cost. Under this approach, expected
credit losses are calculated based on the life of the instrument.
Assets measured at amortised cost
Expected credit loss allowances for financial assets measured at amortised
cost are deducted from the gross carrying amount of the assets. The Group's
financial assets subject to impairment assessment under the ECL model comprise
cash deposits held with banks and trade receivables. In assessing the
impairment of financial assets under the ECL model, the Group assesses
whether the risk of default has increased since initial recognition, by
considering both quantitative and qualitative information, and the analysis is
based on the Group's historical experience of credit default, including
forward-looking information.
The Group's trade receivables comprise balances due from management fees,
performance fees and expense recoveries from funds managed, and are generally
short term and do not contain financing components. Factors considered in
determining whether a default has taken place include how many days past the
due date a payment is, deterioration in the credit quality of a counterparty,
and knowledge of specific events that could influence a counterparty's ability
to pay.
Externally derived credit ratings have been identified as representing the
best available determinant of counterparty credit risk for cash balances and
credit risk is deemed to have increased if the credit rating has deteriorated
at the reporting date relative to the credit rating at the date of
initial recognition.
Impairment of non-financial assets
An impairment test is performed annually or whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets, other than goodwill, that have
suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
Goodwill
Goodwill is tested for impairment at least annually or whenever there is an
indication that the carrying amount may not be recoverable based on
management's judgements regarding the future prospects of the business,
estimates of future cash flows and discount rates. When assessing the
appropriateness of the carrying value of goodwill at year end, the recoverable
amount is considered to be the greater of fair value less costs to sell or
value in use. The pre-tax discount rate applied is based on the Group's
weighted average cost of capital after making allowances for any specific
risks.
Goodwill acquired in a business combination is allocated to the
cash-generating units that are expected to benefit from that business
combination. It is the Group's judgement that the lowest level of
cash-generating unit used to determine impairment is the investment management
segment level.
The business of the Group is managed as a single unit, with asset allocations,
research and other such operational practices reflecting the commonality of
approach across all fund themes. This reflects the Group's global operating
model, based on a single operating platform, into which acquired businesses
are fully integrated and from which acquisition-related synergies are expected
to be realised. Therefore, for the purpose of testing goodwill for impairment,
the Group is considered to have one cash-generating unit to which all goodwill
is allocated and, as a result, no further split of goodwill into smaller
cash-generating units is possible and the impairment review is conducted for
the Group as a whole.
An impairment loss in respect of goodwill cannot be reversed.
Net revenue
Net revenue is total revenue less distribution costs and include foreign
exchange gains or losses on non-Sterling denominated revenues, receivable and
payable balances. The Group's total revenue includes management fees,
performance fees and other revenue. The primary revenue source for the Group
is fee income received or receivable for the provision of investment
management services.
The Group recognises revenue in accordance with the principles of IFRS 15
Revenue from Contracts with Customers. Revenue is recognised to reflect the
transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for
those goods or services. The Group applies the IFRS 15 five-step model for
recognising revenue, which consists of identifying the contract with the
customer; identifying the relevant performance obligations; determining the
amount of consideration to be received under the contract; allocating the
consideration to each performance obligation; and recognising the revenue as
the performance obligations are satisfied. The Group's principal revenue
recognition policies are summarised below:
Management fees
Management fees are presented net of rebates, and are calculated as a
percentage of net fund assets managed in accordance with individual management
agreements. Management fees are calculated and recognised on a monthly basis
in accordance with the terms of the management fee agreements. Management fees
are typically collected on a monthly or quarterly basis.
Performance fees
Performance fees are earned from some arrangements when contractually agreed
performance levels are exceeded within specified performance measurement
periods, typically over one year. The fees are recognised when they are
crystallised, and there is deemed to be a low probability of a significant
reversal in future periods. This is usually at the end of the performance
period or upon early redemption by a fund investor. Once crystallised,
performance fees typically cannot be clawed-back. Performance fees are
presented net of rebates, and are calculated as a percentage of the
appreciation in the net asset value of a fund above a defined hurdle.
Rebates
Rebates relate to repayments of management and performance fees charged
subject to a rebate agreement, typically with institutional investors, and are
calculated based on an agreed percentage of net fund assets managed and
recognised as the service is received. Where rebate agreements exist,
management and performance fees are presented on a net basis in profit or
loss.
Other revenue
Other revenue principally comprises fees for other services, which are
typically driven by the volume of transactions, along with revenues that vary
in accordance with the volume of fund project development activities.
Other revenue includes transaction, structuring and administration fees,
project management fees, and reimbursement by funds of costs incurred by the
Group. This revenue is recognised as the relevant service is provided and it
is probable that the fee will be collected.
Distribution costs
Distribution costs are costs of sales payable to external intermediaries for
marketing and investor servicing. Distribution costs vary based on fund assets
managed and the associated management fee revenue, and are expensed over the
period in which the service is provided.
Employee benefits
Obligations for contributions to defined contribution pension plans are
recognised as an expense in profit or loss within personnel expenses when
payable in accordance with the scheme particulars.
Share-based payments
The Group issues share awards to its employees under share-based compensation
plans which are accounted for under IFRS 2 Share-based Payment.
For equity-settled awards, the fair value of the amounts payable to employees
is recognised as an expense with a corresponding increase in equity over the
vesting period after adjusting for the estimated number of shares that are
expected to vest. The fair value is measured at the grant date using an
appropriate valuation model, taking into account the terms and conditions upon
which the instruments were granted. At each balance sheet date prior to
vesting, the cumulative expense representing the extent to which the vesting
period has expired and management's best estimate of the awards that are
ultimately expected to vest is calculated. The movement in cumulative expense
is recognised in profit or loss within personnel expenses with a corresponding
entry within equity.
For cash-settled awards, the fair value of the amounts payable to employees is
recognised as an expense with a corresponding liability on the Group's balance
sheet. The fair value is measured using an appropriate valuation model, taking
into account the estimated number of awards that are expected to vest and the
terms and conditions upon which the instruments were granted. During the
vesting period, the liability recognised represents the portion of the vesting
period that has expired at the balance sheet date multiplied by the fair value
of the awards at that date. Movements in the liability are recognised in
profit or loss within personnel expenses.
The Group has in place an intragroup recharge arrangement for equity-settled
share-based awards whereby the Company is reimbursed based on the grant-date
cost of share awards granted to employees of subsidiary entities. During the
vest period, the subsidiaries recognise a share-based payment expense with an
intercompany payable to the Company. The Company recognises an intercompany
receivable and a corresponding credit within equity as a share-based payment
reserve. The intercompany balances are settled regularly and reported as
current assets/liabilities.
Finance income and expense
Finance income includes interest receivable on the Group's cash and cash
equivalents and term deposits, and both realised and unrealised gains on
financial assets at FVTPL.
Finance expense includes both realised and unrealised losses on financial
assets at FVTPL. Interest expense on lease liabilities is presented within
finance expense.
Taxation
Tax expense for the year comprises current and deferred tax. Tax is recognised
in profit or loss within tax expense except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year, and any adjustment to the tax payable or
receivable in respect of previous years. It is measured using tax rates
enacted or substantively enacted at the balance sheet date in the countries
where the Group operates. Current tax also includes withholding tax arising
from dividends.
Deferred tax
Deferred tax is recognised using the balance sheet liability method, in
respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation
purposes. The following differences are not provided for:
- goodwill not deductible for tax purposes; and
- differences relating to investments in subsidiaries to the extent that they
will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised only to the extent that it is probable that
future taxable profits will be available against which the assets can be
utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates enacted or
substantively enacted at the balance sheet date.
Dividends
Dividends are recognised when shareholders' rights to receive payments have
been established.
Equity shares
The Company's ordinary shares of 0.01 pence each are classified as equity
instruments. Ordinary shares issued by the Company are recorded at the fair
value of the consideration received or the market price at the day of issue.
Direct issue costs, net of tax, are deducted from equity through share
premium. When share capital is repurchased, the amount of consideration paid,
including directly attributable costs, is recognised as a change in equity.
Own shares
Own shares are held by the Employee Benefit Trust (EBT). The holding of the
EBT comprises own shares that have not vested unconditionally to employees of
the Group. In both the Group and Company, own shares are recorded at cost and
are deducted from retained earnings.
Segmental information
Key management information, including revenues, margins, investment
performance, distribution costs and AuM flows, which is relevant to the
operation of the Group, is reported to and reviewed by the Board on the basis
of the investment management business as a whole. Hence, the Group's
management considers that the Group's services and its operations are not run
on a discrete geographic basis and comprise one business segment (being
provision of investment management services).
Company-only accounting policies
In addition to the above accounting policies, the following specifically
relates to the Company:
Investment in subsidiaries
Investments by the Company in subsidiaries are stated at cost less, where
appropriate, provisions for impairment. Investments in subsidiaries are
reviewed at least annually for impairment or when there is an indication of
impairment.
5) Segmental information
The Group's operations are reported to and reviewed by the Board on the basis
of the investment management business as a whole, hence the Group is treated
as a single segment. The key management information considered is adjusted
EBITDA, an alternative performance measure, which is £77.9 million for the
year as reconciled in the Business review (FY2023: adjusted EBITDA of £106.2
million).
The disclosures below are supplementary, and provide the location of the
Group's non-current assets at year end, which comprise intangible assets,
property, plant and equipment and investment in associates.
Analysis of non-current assets by geography
2024 2023
£m
£m
United Kingdom and Ireland 23.1 24.3
Americas 71.5 70.1
Asia and Middle East 2.6 1.6
Total non-current assets 97.2 96.0
6) Revenue
Management fees are accrued throughout the year in line with prevailing levels
of AuM and performance fees are recognised when they can be estimated reliably
and it is probable that they will crystallise. Performance fees are recognised
when they are crystallised, and there is deemed to be a low probability of a
significant reversal in future periods.
The Group is not considered to be reliant on any single source of revenue.
During the year, none of the Group's funds (FY2023: none) provided more than
10% of total revenue in the year respectively when considering management fees
and performance fees on a combined basis.
Disclosures relating to revenue by location are provided below.
Analysis of revenue by geography
2024 2023
£m
£m
United Kingdom and Ireland 119.4 120.2
Americas 25.1 21.3
Asia and Middle East 44.5 51.7
Total revenue 189.0 193.2
7) Foreign exchange
The foreign exchange rates which had a material impact on the Group's results
are the US dollar, the Euro, the Indonesian rupiah, Saudi riyal and the
Colombian peso.
£1 Closing rate Closing rate Average rate Average rate
as at 30 June
as at 30 June
year ended
year ended
2024
2023
30 June
30 June
2024
2023
US dollar 1.2641 1.2714 1.2609 1.2079
Euro 1.1795 1.1653 1.1653 1.1523
Indonesian rupiah 20,700 19,061 19,763 18,259
Saudi riyal 4.7424 4.7685 4.7292 4.5350
Colombian peso 5,239 5,309 5,030 5,519
Foreign exchange gains are shown below.
2024 2023
£m
£m
Net realised and unrealised hedging gains 1.0 4.4
Translation gains on non-Sterling denominated monetary assets and liabilities 1.5 1.0
Total foreign exchange gains 2.5 5.4
8) Finance income
2024 2023
£m
£m
Interest and investment income 39.1 27.2
Realised gains on disposal of investments 5.2 -
Net realised gains on seed capital investments measured at fair value 11.3 2.4
Net unrealised gains on seed capital investments measured at fair value 15.1 4.6
Interest expense on lease liabilities (note 16) (0.3) (0.3)
Finance income 70.4 33.9
Included within interest and investment income is interest earned on cash
deposits of £25.2 million (FY2023: £16.2 million) and investment income of
£13.9 million (FY2023: £11.0 million) on consolidated funds (note 20c).
Realised gains on disposal of investments include a gain of £4.8 million
arising on the Group's disposal of its 56% investment in Ashmore Avenida
Investments (Real Estate) LLP and £0.4 million gain on partial disposal of
its investment in Indonesian entity, PT Buka Investasi Digital.
Included within net realised and unrealised gains on seed capital investments
totalling £26.4 million (FY2023: £7.0 million) are £4.7 million gains
(FY2023: £2.6 million gains) on financial assets measured at FVTPL (note
20a), £19.1 million gains (FY2023: £1.4 million gains) on non-current
financial assets measured at fair value (note 20b) and £2.6m gains on
consolidated funds (FY2023: £3.0 million gains).
9) Personnel expenses
Personnel expenses during the year comprised the following:
2024 2023
£m
£m
Wages and salaries 25.0 24.0
Performance-related cash bonuses 23.4 17.3
Share-based payments (note 10) 29.5 17.5
Social security costs 2.5 2.4
Pension costs 2.2 2.1
Other costs 2.5 2.9
Total personnel expenses 85.1 66.2
Number of employees
At 30 June 2024, the number of investment management employees of the Group
(including Executive Directors) during the year was as follows:
Average for Average for At At
the year
the year
30 June 2024
30 June 2023
ended
ended
Number*
Number
30 June 2024
30 June 2023
Number
Number
Total investment management employees 305 309 283 310
* Excludes employees of Ashmore Avenida Investments (Real Estate) LLP and its subsidiaries, disposed of effective 30 June 2024.
Directors' remuneration
Disclosures of Directors' remuneration during the year as required by the
Companies Act 2006 are included in the Remuneration report.
There are retirement benefits accruing to two Executive Directors under a
defined contribution scheme (FY2023: two).
10) Share-based payments
The cost related to share-based payments recognised by the Group in
consolidated profit or loss is shown below:
Group 2024 2023
£m
£m
Omnibus Plan 29.4 17.4
Phantom Bonus Plan 0.1 0.1
Total share-based payments expense 29.5 17.5
The total expense recognised for the year in respect of equity-settled
share-based payment awards was £27.9 million (FY2023: £18.5 million), of
which £1.9 million (FY2023: £0.4 million) relates to share awards granted to
key management personnel.
The Executive Omnibus Incentive Plan (Omnibus Plan)
The Omnibus Plan was introduced prior to the Company listing in October 2006
and provides for the grant of share awards, market value options, premium cost
options, discounted options, linked options, phantoms and/or nil-cost options
to employees. The Omnibus Plan will also allow bonuses to be deferred in the
form of share awards with or without matching shares. Awards granted under the
Omnibus Plan typically vest after five years from date of grant, with the
exception of bonus awards which vest after the shorter of five years from date
of grant or on the date of termination of employment. Awards under the
Omnibus Plan are accounted for as equity-settled, with the exception
of phantoms which are classified as cash-settled.
The combined cash and equity-settled payments below represent the share-based
payments relating to the Omnibus Plan.
Total expense by year awards were granted (excluding national insurance)
Group and Company 2024 2023
Year of grant
£m
£m
2018 - 3.0
2019 3.3 3.7
2020 3.8 3.5
2021 3.2 3.9
2022 3.0 3.3
2023 6.3 1.2
2024 8.4 -
Total Omnibus share-based payments expense reported in profit or loss 28.0 18.6
Awards outstanding under the Omnibus Plan were as follows:
i) Equity-settled awards
Group and Company 2024 2024 2023 2023
Number of
Weighted average
Number of shares subject
Weighted average
shares subject
share price
to awards
share price
to awards
Restricted share awards
At the beginning of the year 19,032,817 £3.32 19,311,495 £3.65
Granted 15,307,268 £1.91 5,553,128 £2.14
Vested (3,762,882) £3.32 (4,671,286) £3.25
Forfeited (774,523) £2.81 (1,160,520) £2.17
Awards outstanding at year end 29,802,680 £2.61 19,032,817 £3.32
Bonus share awards
At the beginning of the year 10,146,521 £3.31 10,997,593 £3.64
Granted 385,864 £1.91 3,014,720 £2.14
Vested (2,095,393) £3.30 (3,686,132) £2.87
Forfeited (5,507) £3.00 (179,660) £3.67
Awards outstanding at year end 8,431,485 £3.24 10,146,521 £3.31
Matching share awards
At the beginning of the year 10,210,529 £3.31 10,379,745 £3.65
Granted 681,691 £1.91 3,031,105 £2.14
Vested (1,929,553) £3.31 (2,547,699) £3.28
Forfeited (181,934) £3.13 (652,622) £2.18
Awards outstanding at year end 8,780,733 £3.20 10,210,529 £3.31
Total 47,014,898 £2.84 39,389,867 £3.32
ii) Cash-settled awards
Group and Company 2024 2024 2023 2023
Number of
Weighted average
Number of
Weighted average
shares subject
share price
shares subject
share price
to awards
to awards
Restricted share awards
At the beginning of the year 113,062 £3.13 110,280 £3.60
Granted 146,461 £1.91 47,785 £2.14
Vested (22,920) £3.33 (45,003) £3.24
Forfeited - - - -
Awards outstanding at year end 236,603 £2.36 113,062 £3.13
Bonus share awards
At the beginning of the year 81,740 £3.12 80,511 £3.60
Granted - - 34,982 £2.14
Vested (16,592) £3.33 (33,753) £3.24
Forfeited - - - -
Awards outstanding at year end 65,148 £3.07 81,740 £3.12
Matching share awards
At the beginning of the year 81,740 £3.12 80,511 £3.60
Granted - - 34,982 £2.14
Vested (16,592) £3.33 (33,753) £3.24
Forfeited - - - -
Awards outstanding at year end 65,148 £3.07 81,740 £3.12
Total 366,899 £2.61 276,542 £3.13
iii) Total awards
Group and Company 2024 2024 2023 2023
Number of
Weighted average
Number of
Weighted average
shares subject
share price
shares subject
share price
to awards
to awards
Restricted share awards
At the beginning of the year 19,145,879 £3.32 19,421,775 £3.65
Granted 15,453,729 £1.91 5,600,913 £2.14
Vested (3,785,802) £3.32 (4,716,289) £3.25
Forfeited (774,523) £2.81 (1,160,520) £2.17
Awards outstanding at year end 30,039,283 £2.61 19,145,879 £3.32
Bonus share awards
At the beginning of the year 10,228,261 £3.31 11,078,104 £3.64
Granted 385,864 £1.91 3,049,702 £2.14
Vested (2,111,985) £3.30 (3,719,885) £2.87
Forfeited (5,507) £3.00 (179,660) £3.67
Awards outstanding at year end 8,496,633 £3.24 10,228,261 £3.31
Matching share awards
At the beginning of the year 10,292,269 £3.31 10,460,256 £3.65
Granted 681,691 £1.91 3,066,087 £2.14
Vested (1,946,145) £3.31 (2,581,452) £3.28
Forfeited (181,934) £3.13 (652,622) £2.18
Awards outstanding at year end 8,845,881 £3.20 10,292,269 £3.31
Total 47,381,797 £2.83 39,666,409 £3.32
The weighted average fair value of awards granted to employees under the
Omnibus Plan during the year was £1.91 (FY2023: £2.14), calculated based on
the average Ashmore Group plc closing share price for the five business days
prior to grant. For Executive Directors, the fair value of awards also takes
into account the performance conditions set out in the Remuneration report.
Where the grant of restricted and matching share awards is linked to the
annual bonus process, the fair value of the awards is spread over a period
including the current financial year and the subsequent five years to their
vesting date when the grantee becomes unconditionally entitled to the
underlying shares. The fair value of the remaining awards is spread over the
period from the date of grant to the vesting date.
The liability arising from cash-settled awards under the Omnibus Plan at the
end of the year and reported within trade and other payables on the Group
consolidated balance sheet is £0.3 million (30 June 2023: £0.3 million) of
which £nil (30 June 2023: £nil) relates to vested awards.
11) Other expenses
Other expenses consist of the following:
2024 2023
£m
£m
Travel 2.0 2.1
Professional fees 7.0 5.5
Information technology and communications 8.1 7.8
Amortisation of intangible assets (note 15) 0.2 0.2
Lease expenses 0.5 0.4
Depreciation of property, plant and equipment (note 16) 2.9 3.0
Premises-related costs 1.6 1.3
Insurance 0.8 1.0
Research costs 0.3 0.4
Auditor's remuneration (see below) 1.0 0.9
Operating expenses in consolidated funds 1.2 1.1
Other operating expenses 4.2 4.1
29.8 27.8
Lease expenses relates to short-term leases where the Group has applied the
optional exemption contained within IFRS 16, which permits the cost of
short-term leases (less than 12 months) to be expensed on a straight-line
basis over the lease term.
Auditor's remuneration
2024 2023
£m
£m
Fees for statutory audit services:
- Fees payable to the Company's auditor for the audit of the Group's 0.3 0.2
accounts
- Fees payable to the Company's auditor and its associates for the audit of 0.5 0.5
the Company's subsidiaries pursuant to legislation
Fees for non-audit services:
- Other non-audit services 0.2 0.2
1.0 0.9
12) Taxation
Analysis of tax charge for the year:
2024 2023
£m
£m
Current tax
UK corporation tax on profits for the year 12.9 5.6
Overseas corporation tax charge 11.6 10.5
Adjustments in respect of prior years 0.8 0.1
25.3 16.2
Deferred tax
Origination and reversal of temporary differences (note 18) 4.6 9.1
Tax expense 29.9 25.3
Factors affecting tax charge for the year
2024 2023
£m
£m
Profit before tax 128.1 111.8
Profit on ordinary activities multiplied by the UK tax rate of 25.0% (FY2023: 32.0 22.9
UK blended tax rate of 20.5%)
Effects of:
Permanent differences including non-taxable income and non-deductible expenses 4.7 7.4
Different rate of taxes on overseas profits (4.9) (3.2)
Non-taxable investment returns1 (2.7) (1.9)
Adjustments in respect of prior years 0.8 0.1
Tax expense 29.9 25.3
1. Non-taxable investment returns comprise seed capital investment gains/losses
in certain jurisdictions in which the Group operates for which there are local
tax exemptions.
The tax charge/(credit) recognised in reserves within other comprehensive
income is as follows:
2024 2023
£m
£m
Current tax expense/(credit) on foreign exchange gains/(losses) 0.2 (0.6)
Tax expense/(credit) recognised in reserves 0.2 (0.6)
13) Earnings per share
Basic earnings per share at 30 June 2024 of 13.94 pence (30 June 2023: 12.43
pence) is calculated by dividing the profit after tax for the financial year
attributable to equity holders of the parent of £93.7 million (FY2023:
£83.3 million) by the weighted average number of ordinary shares in issue
during the year, excluding own shares.
Diluted earnings per share is calculated based on basic earnings per share
adjusted for dilutive potential ordinary shares. There is no difference
between the profit for the year attributable to equity holders of the parent
used in the basic and diluted earnings per share calculations.
The weighted average number of shares used in calculating basic and diluted
earnings per share are shown below.
2024 2023
Number of ordinary
Number of ordinary
shares
shares
Weighted average number of ordinary shares used in the calculation of basic 672,458,761 670,224,113
earnings per share
Weighted average number of ordinary shares used in the calculation of diluted 691,730,988 685,760,649
earnings per share
14) Dividends
Dividends paid in the year
Company 2024 2023
£m
£m
Final dividend for FY2023 - 12.10p (FY2022: 12.10p) 85.9 84.8
Interim dividend FY2024 - 4.80p (FY2023: 4.80p) 34.0 33.6
119.9 118.4
In addition, the Group paid £4.5 million (FY2023: £3.3 million) of dividends
to non-controlling interests.
Dividends declared/proposed in respect of the year
Company 2024 2023
pence
pence
Interim dividend per share paid 4.80 4.80
Final dividend per share proposed 12.10 12.10
16.90 16.90
On 4 September 2024, the Board proposed a final dividend of 12.10 pence per
share for the year ended 30 June 2024 (30 June 2023: 12.10 pence final
dividend proposed). This has not been recognised as a liability of the Group
at the year end as it has not yet been approved by shareholders. Based on the
number of shares in issue at the year end that qualify to receive a
dividend, the total amount payable would be £85.1 million.
15) Goodwill and intangible assets
Group Goodwill Fund management intangible assets Total
£m
£m
£m
Cost (at original exchange rate)
At 30 June 2023 70.4 0.9 71.3
Disposal (0.2) (0.9) (1.1)
At 30 June 2024 70.2 - 70.2
Accumulated amortisation and impairment
At 30 June 2022 - (0.6) (0.6)
Amortisation charge for the year - (0.1) (0.1)
At 30 June 2023 - (0.7) (0.7)
Amortisation charge for the year - (0.1) (0.1)
Disposal - 0.8 0.8
At 30 June 2024 - - -
Net book value
At 30 June 2022 90.5 0.4 90.9
Accumulated amortisation for the year - (0.1) (0.1)
Foreign exchange revaluation through reserves* (3.8) (0.1) (3.9)
At 30 June 2023 86.7 0.2 86.9
Accumulated amortisation for the year - (0.1) (0.1)
Disposal (0.2) (0.1) (0.3)
Foreign exchange revaluation through reserves* 0.5 - 0.5
At 30 June 2024 87.0 - 87.0
* Foreign exchange revaluation through reserves is a result of the retranslation
of US dollar-denominated intangibles and goodwill.
Company Goodwill
£m
Cost
At the beginning and end of the year 4.1
Net carrying amount at 30 June 2024 and 2023 4.1
Goodwill impairment review
The Group's goodwill balance relates to the acquisition of subsidiaries. The
Company's goodwill balance relates to the acquisition of the business from ANZ
in 1999. During the year the Group disposed of its interest in Ashmore Avenida
Investments (Real Estate) LLP and as a result derecognised the attributable
goodwill of £0.2 million and intangible assets of £0.1 million.
The Group's goodwill is allocated to a single cash-generating unit. Goodwill
is tested for impairment at least annually or whenever there is an indication
that the carrying amount may not be recoverable. The key assumption used to
determine the recoverable amount is based on fair value less costs of disposal
calculation using the Company's market share price.
An annual impairment review of goodwill was undertaken for the year ending 30
June 2024, and no factors indicating potential impairment of goodwill were
noted.
Based on the calculation as at 30 June 2024 using a market share price of
£1.70, the recoverable amount was in excess of the carrying value of goodwill
and no impairment was implied. In addition, the sensitivity of the recoverable
amount to a 15% change in the Company's market share price will not lead to
any impairment. Therefore, no impairment loss has been recognised in the
current or preceding years.
16) Property, plant and equipment
The Group's property, plant and equipment include right-of-use assets
recognised on lease arrangements as follows:
Group Company
£m
£m
Property, plant and equipment owned by the Group 1.3 0.6
Right-of-use assets 6.0 2.0
Net book value at 30 June 2024 7.3 2.6
The movement in property, plant and equipment is provided below:
Group 2024 2023
Property, plant and equipment
Property, plant and equipment
£m
£m
Cost
At the beginning of the year 23.0 23.0
Additions 3.9 0.6
Retirement of right-of-use assets (3.2) -
Foreign exchange revaluation (0.1) (0.6)
At the end of the year 23.6 23.0
Accumulated depreciation
At the beginning of the year 16.5 13.9
Depreciation charge for the year 2.9 3.0
Retirement of right-of-use assets (3.0) -
Foreign exchange revaluation (0.1) (0.4)
At the end of the year 16.3 16.5
Net book value at 30 June 7.3 6.5
Company 2024 2023
Property, plant and equipment
Property, plant and equipment
£m
£m
Cost
At the beginning of the year 14.2 13.9
Additions 0.2 0.3
At the end of the year 14.4 14.2
Accumulated depreciation
At the beginning of the year 10.1 8.4
Depreciation charge for year 1.7 1.7
At the end of the year 11.8 10.1
Net book value at 30 June 2.6 4.1
Lease arrangements
The Group leases office space in various countries and enters into lease
agreements on office premises with remaining lease periods of one to six
years. Lease terms are negotiated on an individual basis and contain varying
terms and conditions depending on location. The lease agreements do not impose
any covenants other than the security interests in the leased assets that are
held by the lessor. The Group calculates the lease liabilities using the
lessee's incremental borrowing rates that resulted in a weighted average
incremental borrowing rate of 4.8% (FY2023: 4.9%).
The carrying value of right-of-use assets, lease liabilities and the movement
during the year are set out below.
Group Company
Right-of-use assets Lease Right-of-use assets Lease
£m
liabilities
£m
liabilities
£m
£m
At 30 June 2022 7.6 8.0 4.4 4.6
Additions 0.2 0.1 - -
Lease payments - (2.5) - (1.3)
Interest expense (note 8) - 0.3 - 0.1
Depreciation charge (2.4) - (1.2) -
Foreign exchange revaluation through reserves (0.1) (0.1) - -
At 30 June 2023 5.3 5.8 3.2 3.4
Additions 3.1 3.1 - -
Remeasurement (0.2) (0.2) - -
Lease payments - (2.5) - (1.3)
Interest expense (note 8) - 0.3 - 0.1
Depreciation charge (2.1) - (1.2) -
Foreign exchange revaluation through reserves (0.1) (0.1) - -
At 30 June 2024 6.0 6.4 2.0 2.2
The contractual maturities on the minimum lease payments under lease
liabilities are provided below:
Group Company
Maturity analysis - contractual undiscounted cash flows 30 June 30 June 30 June 30 June
2024
2023
2024
2023
£m
£m
£m
£m
Within 1 year 2.4 2.4 1.3 1.3
Between 1 and 5 years 3.9 3.9 1.0 2.3
Later than 5 years 0.9 - - -
Total undiscounted lease liabilities 7.2 6.3 2.3 3.6
Lease liabilities are presented in the balance sheet as follows:
Current 1.9 2.1 1.2 1.2
Non-current 4.5 3.7 1.0 2.2
Total lease liabilities 6.4 5.8 2.2 3.4
Amounts recognised under financing activities in the cash flow statement:
Payment of lease liabilities 2.2 2.2 1.2 1.2
Interest paid 0.3 0.3 0.1 0.1
Total cash outflow for leases 2.5 2.5 1.3 1.3
17) Trade and other receivables
Group Company
2024 2023 2024 2023
£m
£m
£m
£m
Trade debtors 48.7 60.7 2.4 2.1
Prepayments 3.3 4.4 1.7 1.9
Amounts due from subsidiaries - - 31.3 10.4
Loans due from subsidiaries - - 319.7 266.4
Other receivables 8.3 5.3 6.9 3.6
Total trade and other receivables 60.3 70.4 362.0 284.4
Group trade debtors include accrued management and performance fees in respect
of investment management services provided up to 30 June 2024. Management
fees are received in cash when the funds' net asset values are determined,
typically every month or every quarter. The majority of fees are deducted from
the net asset values of the respective funds by independent administrators and
therefore the credit risk of fee receivables is minimal. As at 30 June 2024,
the assessed provision for expected credit losses was immaterial and the Group
has not recognised any credit losses in the current year (30 June 2023: none).
Amounts due from subsidiaries for the Company represent intercompany trading
balances that are repayable within one year.
Loans due from subsidiaries for the Company include an intercompany loan
related to the provision of funding for seed capital investments and cash
invested by subsidiaries in daily-traded investment funds. Loans due from
subsidiaries included within non-current assets amounted to £196.3 million as
at 30 June 2024 (30 June 2023: £167.8 million included within non-current
assets). The intercompany loans are repayable on demand, accrue interest at
market rates and the amounts classified as current are regularly settled
during the year. In line with the Company's historical experience, and after
consideration of current credit exposures, the Company does not expect to
incur any credit losses and has not recognised any credit losses in the
current year (30 June 2023: none).
18) Deferred taxation
Deferred tax assets and liabilities recognised by the Group and Company at
year end are attributable to the following:
2024 2023
Group Other temporary differences Share-based payments Total Other Share-based payments Total
£m
£m
£m
temporary differences
£m
£m
£m
Deferred tax assets 6.3 12.6 18.9 11.0 12.9 23.9
Deferred tax liabilities (8.9) - (8.9) (9.3) - (9.3)
(2.6) 12.6 10.0 1.7 12.9 14.6
2024 2023
Company Other temporary differences Share-based payments Total Other Share-based payments Total
£m
£m
£m
temporary differences
£m
£m
£m
Deferred tax assets - 11.4 11.4 - 11.6 11.6
Deferred taxes at the balance sheet date reflected in these financial
statements have been measured using the relevant enacted or substantively
enacted tax rate for the year in which they are expected to be realised or
settled. Deferred tax assets on share-based payments represent tax deductible
amounts on shares expected to vest in future periods, and are measured based
on the market value of shares as at 30 June 2024.
Movement of deferred tax balances
The movement in the deferred tax balances between the balance sheet dates has
been reflected in the consolidated statement of comprehensive income as
follows:
Group Other Share-based payments Total
temporary differences
£m
£m
£m
At 30 June 2022 3.7 20.2 23.9
Credited/(charged) to the consolidated statement of comprehensive income (1.8) (7.3) (9.1)
Foreign exchange revaluation (0.2) - (0.2)
At 30 June 2023 1.7 12.9 14.6
Charged to the consolidated statement of comprehensive income (3.8) (0.3) (4.1)
Foreign exchange revaluation (0.5) - (0.5)
At 30 June 2024 (2.6) 12.6 10.0
Company Other Share-based payments Total
temporary differences
£m
£m
£m
At 30 June 2022 - 18.2 18.2
Charged to the consolidated statement of comprehensive income - (6.6) (6.6)
At 30 June 2023 - 11.6 11.6
Charged to the consolidated statement of comprehensive income - (0.2) (0.2)
At 30 June 2024 - 11.4 11.4
19) Fair value of financial instruments
The Group has an established control framework with respect to the measurement
of fair values. This framework includes committees that have overall
responsibility for all significant fair value measurements. Each committee
regularly reviews significant inputs and valuation adjustments. If third-party
information is used to measure fair value, the committee assesses and
documents the evidence obtained from the third parties to support such
valuations. There are no material differences between the carrying amounts of
financial assets and liabilities and their fair values at the balance sheet
date.
Fair value hierarchy
The Group measures fair values using the following fair value levels that
reflect the significance of inputs used in making the measurements, based on
the degree to which the fair value is observable:
- Level 1: Valuation is based upon a quoted market price in an active market for
an identical instrument. This fair value measure relates to the valuation of
quoted and exchange traded equity and debt securities.
- Level 2: Valuation techniques are based upon observable inputs, either
directly (i.e. as prices) or indirectly (i.e. derived from prices). This fair
value measure relates to the valuation of quoted equity securities in inactive
markets or in interests in unlisted funds whose net asset values are
referenced to the fair values of the listed or exchange traded securities held
by those funds. Valuation techniques may include using a broker quote in an
inactive market or an evaluated price based on a compilation of primarily
observable market information utilising information readily available via
external sources.
- Level 3: Fair value measurements are derived from valuation techniques that
include inputs not based on observable market data.
For financial instruments that are recognised at fair value on a recurring
basis, the Group determines whether transfers have occurred between levels in
the hierarchy by reassessing categorisation (based on the lowest level input
that is significant to the fair value measurement as a whole) at the end of
the financial year.
The fair value hierarchy of financial instruments which are carried at fair
value at year end is summarised below:
2024 2023
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m
£m
£m
£m
£m
£m
£m
£m
Financial assets
Investment securities 98.1 75.1 27.7 200.9 112.3 88.8 28.8 229.9
Financial assets at FVTPL - non-current - 28.3 29.3 57.6 - 14.9 39.2 54.1
Financial assets at FVTPL - current - 32.8 - 32.8 - 55.8 - 55.8
Derivative financial instruments - 0.2 - 0.2 - - - -
98.1 136.4 57.0 291.5 112.3 159.5 68.0 339.8
Financial liabilities
Third-party interests in consolidated funds 24.9 4.0 10.5 39.4 36.0 9.6 10.6 56.2
Derivative financial instruments - - - - - 0.2 - 0.2
24.9 4.0 10.5 39.4 36.0 9.8 10.6 56.4
Financial instruments not measured at fair value
Financial assets and liabilities that are not measured at fair value include
cash and cash equivalents, term deposits, trade and other receivables, and
trade and other payables. The carrying value of financial assets and financial
liabilities not measured at fair value is considered a reasonable
approximation of fair value as at 30 June 2024 and 2023.
Transfers between levels
The Group recognises transfers into and transfers out of fair value hierarchy
levels at each reporting date. There were no transfers between level 1, level
2 and level 3 of the fair value hierarchy during the year (FY2023: none).
Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 financial assets and
liabilities for the years ended 30 June 2024 and 2023:
Investment Financial assets at Third-party
securities
FVTPL - non-current
interests in consolidated
£m
£m
funds
£m
At 30 June 2022 23.6 39.3 8.3
Additions 2.5 2.9 1.2
Disposals (9.1) (5.0) (3.8)
Unrealised gains recognised in finance income 12.0 2.0 4.9
Unrealised losses recognised in foreign exchange reserve (0.2) - -
At 30 June 2023 28.8 39.2 10.6
Additions - 3.2 1.2
Disposals (7.7) (21.0) (3.3)
Unrealised gains recognised in finance income 6.2 7.7 2.0
Unrealised gains recognised in foreign exchange reserve 0.4 0.2 -
At 30 June 2024 27.7 29.3 10.5
Valuation of financial assets measured at fair value on a recurring basis categorised within level 3
Investments valued using valuation techniques include financial investments
which, by their nature, do not have an externally quoted price based on
regular trades, and financial investments for which markets are no longer
active as a result of market conditions, e.g. market illiquidity. The
valuation techniques used include comparison to recent arm's length
transactions, market approach making reference to other instruments that are
substantially the same, discounted cash flow analysis, enterprise valuation
and net assets approach. These techniques may include a number of assumptions
relating to variables such as interest rate and price earnings multiples.
Changes in assumptions relating to these variables could positively or
negatively impact the reported fair value of these instruments. When
determining the inputs into the valuation techniques used, priority is given
to publicly available prices from independent sources when available, but
overall the source of pricing is chosen with the objective of arriving at a
fair value measurement that reflects the price at which an orderly transaction
would take place between market participants on the measurement date.
The fair value estimates are made at a specific point in time, based upon
available market information and judgements about the financial instruments,
including estimates of the timing and amount of expected future cash flows.
Such estimates could include a marketability adjustment to reflect illiquidity
and/or non-transferability that could result from offering for sale at one
time the Group's entire holdings of a particular financial instrument.
The following tables show the valuation techniques and the significant
unobservable inputs used to estimate the fair value of level 3 investments as
at 30 June 2024 and 2023, and the associated sensitivity to changes in
unobservable inputs to a reasonable alternative.
Asset class and valuation technique 2024 Significant Range of estimates Sensitivity Change in
Fair value
unobservable inputs
factor fair value
£m £m
Unquoted securities
Market approach 5.8 EBITDA multiple 16x +/- 1x +/- 0.3
Marketability adjustment 30% +/- 5% -/+ 0.7
Discounted cash flow 20.0 Discount rate 10%-18% +/- 1% -/+ 1.0
Marketability adjustment 30%-54% +/- 5% -/+ 2.2
Unquoted funds
Net assets approach 31.2 NAV1 1x +/- 5% +/- 1.6
Total financial assets within level 3 57.0
Third-party interests in consolidated funds (10.5) NAV1 1x +/- 5% -/+ 0.5
Asset class and valuation technique 2023 Significant Range of estimates Sensitivity Change in
Fair value
unobservable inputs
factor
fair value
£m £m
Unquoted securities
Market approach 6.4 EBITDA multiple 15x +/- 1x +/- 0.6
Marketability adjustment 30% +/- 5% -/+ 0.7
Discounted cash flow 32.3 Discount rate 10%-17% +/- 1% -/+ 3.0
Marketability adjustment 10%-54% +/- 5% -/+ 2.8
Unquoted funds
Net assets approach 29.3 NAV1 1x +/- 5% +/- 1.5
Total financial assets within level 3 68.0
Third-party interests in consolidated funds (10.6) NAV1 1x +/- 5% -/+ 0.5
1. NAV priced assets include seed
capital investments whose value is determined by the fund administrator using
unobservable inputs. The significant unobservable inputs applied include
EBITDA, market multiples, last observable vendor price and discount rates.
The sensitivity demonstrates the effect of a change in one unobservable input
while other assumptions remain unchanged. There may be a correlation between
the unobservable inputs and other factors that have not been considered. It
should also be noted that some of the sensitivities are non-linear, therefore
larger or smaller impacts should not be interpolated or extrapolated from
these results.
20) Seed capital investments
The Group considers itself a sponsor of an investment fund when it facilitates
the establishment of a fund in which the Group is the investment manager. The
Group ordinarily provides seed capital in order to provide initial scale and
facilitate marketing of the funds to third-party investors. Aggregate
interests held by the Group include seed capital, management fees and
performance fees. The Group generates management and performance fee income
from managing the assets on behalf of third-party investors.
The movements of seed capital investments and related items during the year
are as follows:
Group Financial Investment Other Third-party Financial assets at Total
assets
securities
(relating to
interests in
FVTPL - non-current2
£m
at FVTPL - current
(relating to
consolidated
consolidated
£m
£m
consolidated
funds)1
funds
funds)
£m
£m
£m
Carrying amount at 30 June 2022 32.3 265.1 11.1 (73.0) 36.5 272.0
Additions 23.0 22.8 - (1.4) 19.5 63.9
Disposals - (23.3) - 3.7 (5.0) (24.6)
Fair value movement 0.5 (34.7) (0.5) 14.5 0.4 (19.8)
Carrying amount at 30 June 2023 55.8 229.9 10.6 (56.2) 51.4 291.5
Transfers from consolidated funds to FVTPL 18.1 (21.0) - 2.9 - -
Transfers from FVTPL to consolidated funds (21.4) 23.4 - (2.0) - -
Additions 9.5 - - (0.4) 4.2 13.3
Disposals (33.4) (29.0) - 12.1 (18.4) (68.7)
Fair value movement 4.2 (2.4) (4.6) 4.2 20.1 21.5
Carrying amount at 30 June 2024 32.8 200.9 6.0 (39.4) 57.3 257.6
1. Relates to cash and other assets in consolidated funds that are not investment
securities, see note 20(c).
2. Excludes £0.3 million (30 June 2023: £2.7 million) of other non-current
financial assets measured at fair value that are not classified as seed
capital.
a) Financial assets at FVTPL - current
Where Group companies invest seed capital into funds managed by the Group and
the Group concludes it does not have control over the fund, the interests in
the funds are recognised as financial assets and measured at FVTPL.
If the Group retains control over the fund in accordance with the requirements
of IFRS 10, the seed capital investment will cease to be classified as a
financial asset, and will be consolidated line by line after it is assessed
and concluded that the Group has control over the investment fund.
Investments cease to be classified as consolidated funds when they are no
longer controlled by the Group. A loss of control may happen through sale of
the investment and/or dilution of the Group's holding. During the year two
consolidated funds with an aggregate value of £18.1 million were transferred
to the FVTPL category (FY2023: none). In addition, four funds with an
aggregate value of £21.4 million were transferred from the FVTPL category to
consolidated funds as they met the control requirements under IFRS 10.
FVTPL investments at 30 June 2024 comprise shares held in debt and equity
funds as follows:
2024 2023
£m
£m
Equity funds 23.5 29.6
Debt funds 9.3 26.2
Total 32.8 55.8
Included within finance income are gains of £4.7 million (FY2023: gains of
£2.6 million) on the Group's financial assets measured at FVTPL.
b) Financial assets at FVTPL - non-current
Non-current financial assets include the Group's interests in funds that are
expected to be realised by within a period longer than 12 months from the
balance sheet date.
2024 2023
£m
£m
Infrastructure funds 25.0 22.0
Debt funds 27.3 14.9
Other funds 5.0 14.5
Total1 57.3 51.4
1. Excludes £0.3 million (30 June 2023: £2.7 million) of other non-current
financial assets measured at fair value that are not classified as seed
capital.
Included within finance income are gains of £19.1 million (FY2023: gains of
£1.4 million) on the Group's non-current financial assets measured at fair
value.
c) Consolidated funds
The Group has consolidated 18 investment funds as at 30 June 2024 (30 June
2023: 17 investment funds), over which the Group is deemed to have control
(refer to note 25). Consolidated funds represent seed capital investments
where the Group interest represents a controlling stake in the fund in
accordance with IFRS 10. Consolidated fund assets and liabilities are
presented line by line after intercompany eliminations. The table below sets
out an analysis of the carrying amounts of fund assets and liabilities
consolidated by the Group.
2024 2023
£m
£m
Investment securities1 200.9 229.9
Cash and cash equivalents 6.1 10.3
Other2 (0.1) 0.3
Third-party interests in consolidated funds (39.4) (56.2)
Consolidated seed capital investments 167.5 184.3
1. Investment securities represent trading securities held by consolidated
investment funds and are measured at FVTPL. Note 25 provides a list of the
consolidated funds by asset class, and further detailed information at the
security level is available in the individual fund financial statements.
2. Other includes trade receivables, trade payables and accruals.
The maximum exposure to loss is the carrying amount of the assets held. The
Group has not provided financial support or otherwise agreed to be responsible
for supporting any consolidated or unconsolidated funds financially.
Included within the consolidated statement of comprehensive income is net loss
of £4.7 million (FY2023: net loss of £15.3 million) relating to the results
of the consolidated funds for the year, as follows:
2024 2023
£m
£m
Fair value losses on investment securities (30.5) (44.3)
Third-party interests' share of losses in consolidated funds 13.3 19.3
Net losses on investment securities (17.2) (25.0)
Investment income 13.9 11.0
Audit fees (0.2) (0.2)
Operating expenses (1.2) (1.1)
Net loss on consolidated funds (4.7) (15.3)
Included in the Group's cash generated from operations is £1.0 million cash
utilised in operations (FY2023: £0.1 million cash utilised in operations)
relating to consolidated funds.
As of 30 June 2024, the Group's consolidated funds were domiciled in Guernsey,
Luxembourg, Indonesia and the United States.
21) Financial instrument risk management
Group
The Group is subject to strategic and business, client, investment, treasury
and operational risks throughout its business, as discussed in the Risk
management section. This note discusses the Group's exposure to and management
of the following principal risks which arise from the financial instruments it
uses: credit risk, liquidity risk, interest rate risk, foreign exchange risk
and price risk. Where the Group holds units in investment funds, classified
either as financial assets measured at FVTPL or non-current financial assets,
the related financial instrument risk disclosures in the note below categorise
exposures based on the Group's direct interest in those funds without looking
through to the nature of underlying securities.
Risk management is the ultimate responsibility of the Board, as noted in the
Risk management section.
Capital management
It is the Group's policy that all entities within the Group have sufficient
capital to meet regulatory and working capital requirements and it conducts
regular reviews of its capital requirements relative to its capital resources.
The Group considers its share capital and reserves to constitute its total
capital.
Ashmore reports under IFPR and applies the ICARA approach to the calculation
of the capital and liquidity requirement for its UK regulated entity, AIML.
The Board has determined that the capital required to support the Group's
activities as at 30 June 2024, including its regulatory requirements, is
£97.0 million (30 June 2023: £80.6 million).
Ashmore holds total capital resources of £696.2 million as at 30 June 2024,
providing an excess of £599.2 million over the Group capital requirement
(30 June 2023: £704.8 million, providing an excess of £624.2 million over
the Group capital requirement).
Credit risk
The Group has exposure to credit risk from its normal activities where the
risk is that a counterparty will be unable to pay in full amounts when due.
Exposure to credit risk is monitored on an ongoing basis by senior management
and the Group's Risk Management and Control function. The Group has a
counterparty and cash management policy in place which, in addition to other
controls, restricts exposure to any single counterparty by setting exposure
limits and requiring approval and diversification of counterparty banks and
other financial institutions. The Group's maximum exposure to credit risk is
represented by the carrying value of its financial assets measured at
amortised cost, excluding prepayments. The table below lists financial assets
subject to credit risk.
Notes 2024 2023
£m
£m
Cash and cash equivalents 308.0 478.6
Term deposits 203.8 -
Cash and deposits 511.8 478.6
Trade and other receivables 17 57.0 66.0
Total 568.8 544.6
The Group's cash and cash equivalents and term deposits are predominantly held
with counterparties with credit ratings ranging from A to AAAm as at 30 June
2024 (30 June 2023: A- to AAAm). As at 30 June 2024, the Group held £213.2
million (30 June 2023: £56.8 million) in the Ashmore Global Liquidity Fund.
Term deposits have an average annual interest rate of 5.7% and average
remaining maturity term of three months as at 30 June 2024.
All trade and other receivables are considered to be fully recoverable at year
end. They include fee debtors that arise principally within the Group's
investment management business. They are monitored regularly and,
historically, default levels have been insignificant. There is no significant
concentration of credit risk in respect of fees owing from clients.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
obligations associated with its financial liabilities that are settled
by delivering cash or other financial assets.
The Group produces cash flow forecasts to assist in the efficient management
of the receipt and payment of liquid assets and liabilities. The Group invests
surplus cash held by the operating entities over and above the amounts
required for working capital management in interest-yielding liquidity funds
and term deposits. The Group ensures that liquid assets are maintained in all
regulated subsidiaries to meet regulatory requirements. The Group does not
have any debt as at 30 June 2024 (30 June 2023: none).
In order to manage liquidity risk, there is a Group liquidity policy to ensure
that there is sufficient access to funds to cover all forecast committed
requirements for the next 12 months.
The table below summarises the maturity profile of the Group's financial
liabilities at 30 June 2024 and 30 June 2023 based on contractual undiscounted
payments:
At 30 June 2024
Within 1 year 1-5 years More than Total
£m
£m
5 years
£m
£m
Current trade and other payables 34.2 - - 34.2
Lease liabilities 2.4 3.9 0.9 7.2
Total 36.6 3.9 0.9 41.4
At 30 June 2023
Within 1 year 1-5 years More than Total
£m
£m
5 years
£m
£m
Current trade and other payables 24.2 - - 24.2
Lease liabilities 2.4 3.9 - 6.3
Total 26.6 3.9 - 30.5
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of
financial instruments will fluctuate because of changes in market interest
rates.
The principal interest rate risk is the risk that the Group will sustain a
reduction in interest income through adverse movements in interest rates. This
relates to deposits with banks and liquidity funds held in the ordinary course
of business. The Group has a cash management policy which monitors cash levels
and returns within set parameters on a continuing basis.
The effective interest earned on bank balances and term deposits during the
year is given in the table below:
2024 2023
%
%
Deposits with banks and liquidity funds 5.18 3.22
At 30 June 2024, if interest rates over the year had been 50 basis points
higher/lower with all other variables held constant, profit before tax for the
year would have been £2.4 million higher/lower (FY2023: £2.5 million
higher/lower), mainly as a result of higher/lower interest on cash balances.
In addition, the Group is indirectly exposed to interest rate risk where the
Group holds seed capital investments in funds that invest in debt securities.
Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future cash flows of
financial instruments will fluctuate because of changes in foreign exchange
rates.
The Group's revenue is almost entirely denominated in US dollars, while the
majority of the Group's costs are denominated in Sterling. Consequently, the
Group has an exposure to movements in the GBP:USD exchange rate. In addition,
the Group operates globally, which means that it may enter into contracts and
other arrangements denominated in local currencies in various countries. The
Group also holds a number of seed capital investments denominated mainly in US
dollars, Colombian pesos and Indonesian rupiah.
The Group's policy is to hedge a proportion of the Group's revenue by using a
combination of forward foreign exchange contracts and options for a period of
up to two years forward. The Group also sells US dollars at spot rates when
opportunities arise.
The table below shows the Group's sensitivity to a 5% exchange movement in the
US dollar, Colombian peso, Indonesian rupiah, Saudi riyal and the Euro, net of
hedging activities.
2024 2023
Foreign currency sensitivity test Impact on Impact on Impact on Impact on
profit
equity
profit
equity
before tax
£m
before tax
£m
£m
£m
US dollar +/- 5% 1.6 17.1 2.0 12.5
Colombian peso +/- 5% 0.1 0.9 0.2 0.8
Indonesian rupiah +/- 5% 0.1 0.5 - 0.5
Saudi riyal +/- 5% 0.5 0.9 0.4 1.0
Euro +/- 5% 0.4 0.3 0.3 0.3
Price risk
Price risk is the risk that the fair value or future cash flows of financial
instruments will fluctuate because of market changes.
Seed capital
The Group is exposed to the risk of changes in market prices in respect of
seed capital investments. Such price risk is borne by the Group directly
through interests in financial assets measured at fair value or through
consolidation of underlying results, assets and liabilities of consolidated
funds. Details of seed capital investments held are given in note 20.
The Group has procedures defined by the Board governing the appraisal,
approval and monitoring of seed capital investments.
At 30 June 2024, a 5% movement in the fair value of these investments would
have a £12.9 million (FY2023: £14.6 million) impact on profit before tax.
Management and performance fees
The Group is also indirectly exposed to price risk in connection with the
Group's management fees, which are based on a percentage of value of AuM, and
fees based on performance. Movements in market prices, exchange and interest
rates could cause the AuM to fluctuate, which in turn could affect fees
earned. Performance fee revenues could also be reduced depending upon market
conditions.
Management and performance fees are diversified across a range of investment
themes and are not measurably correlated to any single market index in
Emerging Markets. In addition, the policy of having funds with year ends
staged throughout the financial year has meant that in periods of steep market
decline, some performance fees have still been recorded. The profitability
impact is likely to be less than this, as cost mitigation actions would apply,
including the reduction of the variable compensation paid to employees.
Using the year end AuM level of US$49.3 billion and applying the year's
average net management fee rate of 39bps, a 5% movement in AuM would have a
US$9.5 million impact, equivalent to £7.5 million using a year end exchange
rate of 1.2641, on management fee revenues (FY2023: US$55.9 billion and
applying the year's average net management fee rate of 38bps, a 5% movement in
AuM would have a US$10.6 million impact, equivalent to £8.3 million using a
year end exchange rate of 1.2714, on management fee revenues).
Hedging activities
The Group uses forward and option contracts to hedge its exposure to foreign
currency risk. These hedges, which have been assessed as effective cash flow
hedges as at 30 June 2024, protect a proportion of the Group's revenue cash
flows from foreign exchange movements. The cumulative fair value of the
outstanding foreign exchange hedges asset at 30 June 2024 was £0.1 million
and is included within the Group's derivative financial instruments (30 June
2023: £0.2 million foreign exchange hedges asset included in derivative
financial instruments).
The notional and fair values of foreign exchange hedging instruments were as
follows:
2024 2023
Notional Fair value Notional Fair value
amount
assets/
amount
assets/
US$m
(liabilities)
US$m
(liabilities)
£m
£m
Cash flow hedges
Foreign exchange nil-cost option collars 40.0 0.1 40.0 0.2
40.0 0.1 40.0 0.2
The maturity profile of the Group's outstanding hedges is shown below.
Notional amount of option collars maturing: 2024 2023
US$m
US$m
Within 6 months 20.0 30.0
Between 6 and 12 months 20.0 10.0
Later than 12 months - -
40.0 40.0
When hedges are assessed as effective, intrinsic value gains and losses are
initially recognised in other comprehensive income and later reclassified to
profit or loss as the corresponding hedged cash flows crystallise. Time value
in relation to the Group's hedges is excluded from being part of the hedging
item and, as a result, the net unrealised loss related to the time value of
the hedges is recognised in profit or loss for the year.
No intrinsic value gain or loss (FY2023: £4.9 million gain) on the Group's
hedges has been recognised through other comprehensive income in the year and
a £0.1 million intrinsic value loss (FY2023: £0.5 million intrinsic value
gain) was reported in profit or loss within finance exchange in the year.
Included within the net realised and unrealised hedging gain of £1.0 million
(note 7) recognised at 30 June 2024 (30 June 2023: £4.4 million gain) are:
- a £0.1 million loss in respect of foreign exchange hedges covering net
management fee income for the financial year ending 30 June 2024 (FY2023:
£0.5 million gain); and
- a £1.1 million gain in respect of crystallised foreign exchange contracts
(FY2023: £3.9 million gain).
Company
The risk management processes of the Company, including those relating to the
specific risk exposures covered below, are aligned with those of the Group as
a whole unless stated otherwise.
In addition, the risk definitions that apply to the Group are also relevant
for the Company.
Credit risk
The Company's maximum exposure to credit risk is represented by the carrying
value of its financial assets measured at amortised cost, excluding
prepayments. The table below lists financial assets subject to credit risk.
Notes 2024 2023
£m
£m
Cash and cash equivalents 20.1 327.7
Term deposits 202.0 -
Cash and deposits 222.1 327.7
Trade and other receivables 17 360.3 282.5
Total 582.4 610.2
The Company's cash and cash equivalents term deposits are held with
counterparties which have credit ratings ranging from A to AAAm as at 30 June
2024 (30 June 2023: A- to AAAm).
Term deposits have an average annual interest rate of 5.6% and average
remaining maturity term of three months as at 30 June 2024.
All trade and other receivables are considered to be fully recoverable and
none were overdue at year end (30 June 2023: none overdue).
Liquidity risk
The Company's exposure to liquidity risk is not considered to be material and,
therefore, no further information is provided.
Details on other commitments are provided in note 29.
Interest rate risk
The principal interest rate risk for the Company is that it could sustain a
reduction in interest revenue from bank deposits held in the ordinary course
of business through adverse movements in interest rates.
The effective interest earned on bank balances and term deposits during the
year is given in the table below:
2024 2023
%
%
Deposits with banks and liquidity funds 5.73 4.17
At 30 June 2024, if interest rates over the year had been 50 basis points
higher/lower with all other variables held constant, profit before tax for the
year would have been £1.4 million higher/lower (FY2023: £1.2 million
higher/lower), mainly as a result of higher/lower interest on cash balances.
Foreign exchange risk
The Company is exposed primarily to foreign exchange risk in respect of US
dollar cash balances and US dollar-denominated intercompany balances. However,
such risk is not hedged by the Company.
At 30 June 2024, if the US dollar had strengthened/weakened by 5% against
Sterling with all other variables held constant, profit before tax for the
year would have increased/decreased by £16.5 million (FY2023:
increased/decreased by £11.9 million).
22) Share capital
Authorised share capital
Group and Company 2024 2024 2023 2023
Number of
Nominal
Number
Nominal
shares
value
of shares
value
£'000
£'000
Ordinary shares of 0.01p each 900,000,000 90 900,000,000 90
Issued share capital - allotted and fully paid
Group and Company 2024 2024 2023 2023
Number of
Nominal
Number
Nominal
shares
value
of shares
value
£'000
£'000
Ordinary shares of 0.01p each 712,740,804 71 712,740,804 71
All the above ordinary shares represent equity of the Company and rank pari
passu in respect of participation and voting rights.
At 30 June 2024, there were equity-settled share awards issued under the
Omnibus Plan totalling 47,014,898 (30 June 2023: 39,389,867) shares that have
release dates ranging from September 2024 to September 2028. Further details
are provided in note 10.
23) Own shares
The Trustees of the Ashmore 2004 Employee Benefit Trust (EBT) acquire and hold
shares in Ashmore Group plc with a view to facilitating the vesting of share
awards. As at 30 June 2024, the EBT owned 49,481,410 (30 June 2023:
50,834,683) ordinary shares of 0.01p with a nominal value of £4,948 (30 June
2023: £5,083) and shareholders' funds are reduced by £149.5 million (30 June
2023: £164.2 million) in this respect. The EBT is periodically funded by
the Company for these purposes.
24) Trade and other payables
Group Group Company Company
2024
2023
2024
2023
£m
£m
£m
£m
Current
Trade payables 15.5 13.3 3.4 3.0
Accruals and provisions 18.7 10.9 9.1 4.5
Amounts due to subsidiaries - - 11.1 20.5
Total trade and other payables 34.2 24.2 23.6 28.0
25) Interests in subsidiaries
Operating subsidiaries held by the Company
There were no movements in investment in subsidiaries held by the Company
during the year.
Company 2024 2023
£m
£m
Cost
At 30 June 2024 and 2023 19.9 19.9
In the opinion of the Directors, the following subsidiary undertakings
principally affected the Group's results or balance sheet at 30 June 2024. A
full list of the Group's subsidiaries and all related undertakings is
disclosed in note 33.
Name Country of incorporation/ formation and principal place of operation % of equity shares held
by the Group
Ashmore Investments (UK) Limited England 100.00
Ashmore Investment Management Limited England 100.00
Ashmore Investment Advisors Limited England 100.00
Ashmore Management Company Colombia SAS Colombia 58.34
Ashmore CAF-AM Management Company SAS Colombia 52.78
Ashmore Management Company Limited Guernsey 100.00
Ashmore Investment Management India LLP India 100.00
PT Ashmore Asset Management Indonesia Tbk Indonesia 60.04
Ashmore Investment Management (Ireland) Limited Ireland 100.00
Ashmore Japan Co. Limited Japan 100.00
Ashmore Investments Saudi Arabia Saudi Arabia 100.00
Ashmore Investment Management (Singapore) Pte. Ltd. Singapore 100.00
Ashmore Investment Management (US) Corporation USA 100.00
Ashmore Investment Advisors (US) Corporation USA 100.00
Consolidated funds
The Group consolidated the following 18 investment funds as at 30 June 2024
(30 June 2023: 17 investment funds) over which the Group is deemed to have
control:
Name Type of fund Country of incorporation/ principal place of operation Proportion of ownership interest %
Ashmore Emerging Markets Debt and Currency Fund Limited Alternatives Guernsey 57.72
Ashmore SICAV Emerging Markets Corporate Debt ESG Fund Corporate debt Luxembourg 100.00
Ashmore SICAV Emerging Markets India Equity Fund Equity Luxembourg 100.00
Ashmore SICAV Emerging Markets Global Small-Cap Equity Fund Equity Luxembourg 48.01
Ashmore SICAV Emerging Markets Middle East Equity Fund Equity Luxembourg 83.46
Ashmore SICAV Emerging Markets Shariah Active Equity Fund Equity Luxembourg 78.29
Ashmore SICAV Emerging Markets Indonesian Equity Fund Equity Luxembourg 100.00
Ashmore SICAV Emerging Markets Investment Grade Total Return Fund Blended debt Luxembourg 100.00
Ashmore SICAV Emerging Markets Total Return Debt Fund 2 Blended debt Luxembourg 100.00
Ashmore SICAV Emerging Markets Local Currency Bond Fund 2 Local currency Luxembourg 100.00
Ashmore Dana USD Fixed Income Local currency Indonesia 85.76
Ashmore Dana Pasar Uang Syariah Local currency Indonesia 99.61
Ashmore Emerging Markets Local Currency Bond Fund Local currency USA 84.94
Ashmore Emerging Markets Active Equity Fund Equity USA 88.01
Ashmore Emerging Markets Equity ESG Fund Equity USA 100.00
Ashmore Emerging Markets Equity Ex China Fund Equity USA 100.00
Ashmore Emerging Markets Low Duration Select Fund Corporate debt USA 100.00
Ashmore Emerging Markets Debt Fund Corporate debt USA 100.00
26) Investment in associates
The Group held an interest in the following associate as at 30 June 2024, over
which it continues to have significant influence:
Name Type Nature of business Country of incorporation/ % of equity shares held by the Group
formation and principal
place of operation
Taiping Fund Management Company Associate Investment management China 5.23%
The movement in the carrying value of investment in associates for the year is
provided below:
Associates 2024 2023
£m
£m
At the beginning of the year 2.3 2.1
Share of profit for the year 0.5 0.5
Foreign exchange revaluation (0.1) (0.3)
At the end of the year 2.7 2.3
The summarised financial information for the associate is shown below.
Associates 2024 2023
£m
£m
Total assets 59.7 53.2
Total liabilities (7.5) (10.0)
Net assets 52.2 43.2
Group's share of net assets 2.7 2.3
Revenue for the year 20.7 23.6
Profit for the year 9.6 9.6
Group's share of profit for the year 0.5 0.5
The carrying value of the investment in associates represents the cost of
acquisition subsequently adjusted for share of profit or loss and other
comprehensive income or loss. No permanent impairment is believed to exist
relating to the associate as at 30 June 2024. The Group had no undrawn
capital commitments (30 June 2023: £nil) to investment funds managed by the
associate.
27) Interests in structured entities
The Group has interests in structured entities as a result of the management
of assets on behalf of its clients. Where the Group holds a direct interest in
a closed-ended fund, private equity fund or open-ended pooled fund such as a
SICAV, the interest is accounted for either as a consolidated structured
entity or as a financial asset, depending on whether the Group has control
over the fund or not.
The Group's interest in structured entities is reflected in the Group's AuM.
The Group is exposed to movements in AuM of structured entities through the
potential loss of fee income as a result of client withdrawals. Outflows from
funds are dependent on market sentiment, asset performance and investor
considerations. Further information on these risks can be found in the
Strategic report.
Considering the potential for changes in AuM of structured entities,
management has determined that the Group's unconsolidated structured entities
include segregated mandates and pooled funds vehicles. Disclosure of the
Group's exposure to unconsolidated structured entities has been made on this
basis.
The reconciliation of AuM reported by the Group within unconsolidated
structured entities is shown below.
Total AuM Less: AuM within
US$bn
AuM within consolidated
unconsolidated structured
funds
entities
US$bn
US$bn
30 June 2023 55.9 0.3 55.6
30 June 2024 49.3 0.3 49.0
Included in the Group's consolidated management fees of £162.6 million
(FY2023: £185.4 million) are management fees amounting to £161.9 million
(FY2023: £184.2 million) earned from unconsolidated structured entities.
The table below shows the carrying values of the Group's interests in
unconsolidated structured entities, recognised in the Group balance sheet,
which are equal to the Group's maximum exposure to loss from those interests.
2024 2023
£m
£m
Management fees receivable 37.6 37.7
Trade and other receivables 1.5 1.3
Seed capital investments* 90.0 107.2
Total exposure 129.1 146.2
* Comprise financial assets measured at fair value and non-current financial
assets measured at fair value (refer to note 20).
The main risk the Group faces from its beneficial interests in unconsolidated
structured entities arises from a potential decrease in the fair value of seed
capital investments. The Group's beneficial interests in seed capital
investments are disclosed in note 20. Note 21 includes further information on
the Group's exposure to market risk arising from seed capital investments.
28) Related party transactions
Related parties of the Group include key management personnel, close family
members of key management personnel, subsidiaries, associates, Ashmore funds,
the EBT and The Ashmore Foundation.
Key management personnel - Group and Company
The compensation paid to or payable to key management personnel is shown
below:
2024 2023
£m
£m
Short-term benefits 1.6 0.8
Defined contribution pension costs - -
Share-based payment benefits (note 10) 2.0 0.4
3.6 1.2
Short-term benefits include salary and fees, benefits and cash bonus.
Share-based payment benefits represent the cost of equity-settled awards
charged to the consolidated statement of comprehensive income.
Details of the remuneration of Directors are given in the Remuneration report.
During the year, there were no other transactions entered into with key
management personnel (FY2023: none). Aggregate key management personnel
interests in consolidated funds at 30 June 2024 were £32.2 million (30 June
2023: £44.5 million).
Transactions with subsidiaries - Company
Details of transactions between the Company and its subsidiaries are shown
below:
2024 2023
£m
£m
Transactions during the year
Management fees 57.0 59.7
Net dividends 99.6 145.2
Loans repaid by/(advanced to) subsidiaries (53.3) 110.5
Amounts receivable or payable to subsidiaries are disclosed in notes 17 and 24
respectively.
Transactions with Ashmore funds - Group
During the year, the Group received £61.7 million of gross management fees
and performance fees (FY2023: £64.0 million) from the
96 funds (FY2023: 104 funds) it manages and which are classified as related
parties. As at 30 June 2024, the Group had receivables due from funds of £4.9
million (30 June 2023: £4.6 million) that are classified as related parties.
Transactions with the EBT - Group and Company
The EBT has been provided with an interest free loan facility to allow it to
acquire Ashmore shares in order to satisfy outstanding unvested share awards.
The EBT is included within the results of the Group and the Company. As at 30
June 2024, the loan outstanding was £138.4 million (30 June 2023: £150.7
million).
Transactions with The Ashmore Foundation - Group and Company
The Ashmore Foundation is a related party to the Group. The Foundation was set
up to provide financial grants to worthwhile causes within the Emerging
Markets countries in which Ashmore invests and/or operates with a view to
giving back to the countries and communities. The Group donated £0.6 million
to the Foundation during the year (FY2023: £0.5 million).
29) Commitments
The Group has undrawn investment commitments relating to seed capital
investments as follows:
Group 2024 2023
£m
£m
Ashmore Andean Fund II, LP 0.1 0.1
Ashmore Avenida Colombia Real Estate Fund I (Cayman) LP - 0.1
Ashmore I - CAF Colombian Infrastructure Senior Debt Fund 4.4 5.7
Fondo Ashmore Andino III - FCP 2.7 3.0
Total undrawn investment commitments 7.2 8.9
Company
The Company has undrawn loan commitments to other Group entities totalling
£432.0 million (30 June 2023: £482.5 million) to support their investment
activities but has no investment commitments of its own (30 June 2023: none).
30) Contingent assets and liabilities
The Company and its subsidiaries can be party to legal claims arising in the
normal course of business. The Directors do not anticipate that the outcome of
any such potential proceedings and claims will have a material adverse effect
on the Group's financial position and at present there are no such claims
where their financial impact can be reasonably estimated. There are no other
material contingent assets or liabilities.
31) Non-controlling interests
The Group's material NCI as at 30 June 2024 was held in PT Ashmore Asset
Management Indonesia Tbk (Ashmore Indonesia).
Set out below is summarised financial information and the amounts disclosed
are before intercompany eliminations.
40% NCI
Ashmore Indonesia
Summarised balance sheet 2024 2023
£m
£m
Total assets 18.4 19.8
Total liabilities (3.9) (4.4)
Net assets 14.5 15.4
Non-controlling interests 5.8 6.1
Summarised statement of comprehensive income
Net revenue 10.3 10.9
Profit for the period 5.3 5.1
Other comprehensive loss (1.2) (0.9)
Total comprehensive income 4.1 4.2
Profit allocated to NCI 2.1 1.6
Dividends paid to NCI 1.9 2.3
Summarised cash flows
Cash flows from operating activities 5.4 4.6
Cash flows generated from investing activities 2.5 -
Cash flows used in financing activities (5.2) (6.3)
Net increase/(decrease) in cash and cash equivalents 2.7 (1.7)
During the year, the Group disposed of its 56% interest in Ashmore Avenida
Investments (Real Estate) LLP and therefore derecognised the NCI carrying
value of £5.5 million.
32) Post-balance sheet events
There are no post-balance sheet events that require adjustment or disclosure
in the Group consolidated financial statements.
33) Subsidiaries and related undertakings
The following is a full list of the Ashmore Group plc subsidiaries and related
undertakings as at 30 June 2024, along with the registered address and the
percentage of equity owned by the Group. Related undertakings comprise
significant holdings in associated undertakings and Ashmore sponsored public
funds in which the Group owns greater than 20% interest.
Name Classification % voting interest Registered address and place of incorporation
Ashmore Investments (UK) Limited1 Subsidiary 100.00 61 Aldwych, London WC2B 4AE United Kingdom
Ashmore Investment Management Limited Subsidiary 100.00
Ashmore Investment Advisors Limited Subsidiary 100.00
Aldwych Administration Services Limited (dormant) Subsidiary 100.00
Ashmore Asset Management Limited (dormant) Subsidiary 100.00
Ashmore Avenida Investments (Real Estate) LLP2 Subsidiary 56.00
Ashmore Investment Management (Ireland) Limited Subsidiary 100.00 32 Molesworth Street, Dublin 2, D02 Y512, Ireland
Ashmore Investment Management India LLP Subsidiary 100.00 Units 206, 207, 208 Ceejay House, Shivsagar Estate, Dr. Annie Besant Road,
Worli, Mumbai 400 018, India
Ashmore India Equities Fund Consolidated fund 83.02
Ashmore Investment Management (US) Corporation Subsidiary 100.00 The Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801, USA
Ashmore Investment Advisors (US) Corporation Subsidiary 100.00
Ashmore EM Blended Debt Fund GP, LLC Subsidiary 100.00
Ashmore EM Active Equity Fund GP, LLC Subsidiary 100.00
Ashmore EM Equity Fund GP, LLC Subsidiary 100.00
Avenida Partners LLC2 Subsidiary 100.00 Cogency Global Inc., 850 New Burton Road, Suit 201, Dover, DE 19904, USA
Avenida CREF I Cayman Manager LLC2 Subsidiary 100.00
Avenida CREF I Manager LLC2 Subsidiary 100.00
Avenida A2 Partners LLC2 Subsidiary 100.00
Avenida Colombia Member LLC2 Subsidiary 83.30
Avenida CREF II Partners LLC2 Subsidiary 100.00
Avenida CREF II GP LLC2 Subsidiary 100.00
MCA Partners LLC2 Subsidiary 100.00
1. Ashmore Investments (UK) Limited (registered number 3345198) is exempt from
the requirements relating to the audit of accounts under section 479A of the
UK Companies Act 2006.
2. Ashmore Avenida Investments (Real Estate) LLP and its subsidiaries were
disposed of effective 30 June 2024, certain completion formalities pending.
Name Classification % voting interest Registered address and place of incorporation
Avenida REF Holding SA2 Subsidiary 100.00 Yamandu 1321, 11500
Montevideo,
Uruguay
Avenida CREF II Manager SRL2 Subsidiary 99.99
Avenida CREF Partners SRL2 Subsidiary 99.99
Avenida CREF II GP SRL2 Subsidiary 85.09
Ashmore Avenida LatAm Energy Efficient Affordable Housing Fund III GP (in Subsidiary 100.00 10 rue du Château d'Eau, L-3364 Leudelange, Grand Duchy of Luxembourg
liquidation)
Ashmore Investment Management (Singapore) Pte. Ltd. Subsidiary 100.00 1 George Street, #15-04, Singapore 049145
KCH Cairo Pte. Ltd (dormant) Subsidiary 100.00
KCH Cairo S.A.E. (dormant) Subsidiary 99.20 Zone (T) - Emaar, Up Town Cairo, Mokattam, Cairo, Egypt
PT Ashmore Asset Management Indonesia Tbk Subsidiary 60.04 Pacific Century Place, 18th Floor,
SCBD Lot 10, Jl. Jenderal. Sudirman Kav.
52-53 Jakarta 12190, Indonesia
Ashmore Dana Pasar Uang Syariah Consolidated fund 99.61
Ashmore Dana USD Fixed Income Consolidated fund 85.76
Ashmore Management Company Colombia SAS Subsidiary 58.34 Carrera 7 No. 75-66,
Office 701 & 702,
Bogotá, Colombia
Ashmore-CAF-AM Management Company SAS Subsidiary 52.78
Ashmore Holdings Colombia SAS Subsidiary 100.00
Ashmore Investment Advisors S.A. Sociedad Fiduciaria Subsidiary 100.00
Ashmore Backup Management Company SAS Subsidiary 100.00
Avenida Colombia Management Company SAS2 Subsidiary 100.00
Ashmore Peru Backup Management Subsidiary 100.00 Av. Circunvalación del Club Golf Los Incas No. 134, Torre 1, Of. 505, Surco.
Lima, Perú
Ashmore Japan Co. Limited Subsidiary 100.00 11F, Shin Marunouchi Building 1-5-1 Marunouchi, Chiyoda-ku,
Tokyo 100-6511, Japan
Ashmore Investments (Colombia) SL Subsidiary 100.00 c/o Hermosilla 11, 4ºA, 28001 Madrid, Spain
Ashmore Management (DIFC) Limited Subsidiary 100.00 Unit L30-07, Level 30, ICD Brookfield Place, Dubai International Financial
Centre,
Dubai, UAE
Ashmore Investment Saudi Arabia Subsidiary 100.00 3rd Floor Tower B, Olaya Towers,
Olaya Main Street, Riyadh, Saudi Arabia
Ashmore AISA (Cayman) Limited Subsidiary 100.00 PO Box 309, Ugland House, Grand Cayman,
KY1-1104, Cayman Islands
AA Development Capital Investment Managers Subsidiary 55.00 Les Cascades Building,
(Mauritius) LLC (in liquidation)
33 Edith Cavell Street, Port Louis,
Mauritius
Ashmore Investments (Holdings) Limited Subsidiary 100.00
Name Classification % voting interest Registered address and place of incorporation
Ashmore Management Company Limited Subsidiary 100.00 Trafalgar Court,
Les Banques,
St Peter Port,
GY1 3QL,
Guernsey
Ashmore Global Special Situations Fund 3 (GP) Limited Subsidiary 100.00
Ashmore Global Special Situations Fund 4 (GP) Limited Subsidiary 100.00
Ashmore Global Special Situations Fund 5 (GP) Limited Subsidiary 100.00
Ashmore Venezuela Recovery Fund 2 Ltd Financial asset 40.00
Ashmore Emerging Markets Debt and Currency Fund Limited Consolidated fund 57.72
Ashmore SICAV Emerging Markets Middle East Equity Fund Consolidated fund 83.46 10, rue du Chateau d'Eau,
L-3364 Leudelange,
Grand-Duchy of Luxembourg
Ashmore SICAV Emerging Markets Total Return Debt Fund 2 Consolidated fund 100.00
Ashmore SICAV Emerging Markets Corporate Debt ESG Fund Consolidated fund 100.00
Ashmore SICAV Emerging Markets India Equity Fund Consolidated fund 100.00
Ashmore SICAV Emerging Markets Global Small-Cap Equity Fund Consolidated fund 48.01
Ashmore SICAV Emerging Markets Investment Grade Total Return Fund Consolidated fund 100.00
Ashmore SICAV Emerging Markets Indonesian Equity Fund Consolidated fund 100.00
Ashmore SICAV Emerging Markets Local Currency Bond Fund 2 Consolidated fund 100.00
Ashmore SICAV Emerging Markets Shariah Active Equity Fund Consolidated fund 78.29
Ashmore SICAV Emerging Markets Investment Grade Local Currency Fund Consolidated fund 58.33
Ashmore SICAV Emerging Markets Equity ESG Fund Financial asset 30.14
Ashmore Emerging Markets Equity Ex China Fund Consolidated fund 100.00 50 South LaSalle Street,
Chicago, Illinois 60603, USA
Ashmore Emerging Markets Debt Fund Consolidated fund 100.00
Ashmore Emerging Markets Active Equity Fund Consolidated fund 88.01
Ashmore Emerging Markets Local Currency Bond Fund Consolidated fund 84.94
Ashmore Emerging Markets Equity ESG Fund Consolidated fund 100.00
Ashmore Emerging Markets Low Duration Select Fund Consolidated fund 100.00
Cautionary statement regarding forward-looking statements
It is possible that this document could or may contain forward-looking
statements that are based on current expectations or beliefs, as well as
assumptions about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as anticipate, target,
expect, estimate, intend, plan, goal, believe, will, may, should, would, could
or other words of similar meaning.
Undue reliance should not be placed on any such statements because, by their
very nature, they are subject to known and unknown risks and uncertainties and
can be affected by other factors that could cause actual results, and the
Group's plans and objectives, to differ materially from those expressed or
implied in the forward-looking statements. There are several factors that
could cause actual results to differ materially from those expressed or
implied in forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in global, political, economic,
business, competitive, market and regulatory forces, future exchange and
interest rates, changes in tax rates and future business combinations or
dispositions. The Group undertakes no obligation to revise or update any
forward-looking statements contained within this document, regardless of
whether those statements are affected as a result of new information, future
events or otherwise.
Statutory accounts
The financial information set out above does not constitute the Group's
statutory accounts for the years ending 30 June 2024 or 30 June 2023.
Statutory accounts for 2023 have been delivered to the registrar of companies.
The statutory accounts for 2024 will be delivered in due course and the
auditors have reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006 in
respect of the accounts for 2024.
Alternative Performance Measures
Ashmore discloses APMs to assist shareholders' understanding of the Group's
operational performance during the accounting period and to allow consistent
comparisons with prior periods.
The calculation of APMs is consistent with the financial year ended 30 June
2023. Historical disclosures relating to APMs, including explanations and
reconciliations, can be found in the respective interim financial reports and
Annual Reports and Accounts.
Net revenue
As shown in the CSCI, net revenue is total revenue less distribution costs and
including FX. This provides a comprehensive view of the revenues recognised by
the Group in the period.
Reference FY2024 FY2023
£m
£m
Total revenue CSCI 189.0 193.2
Distribution costs CSCI (2.2) (2.2)
FX CSCI 2.5 5.4
Net revenue 189.3 196.4
Net management fees
The principal component of the Group's revenues is management fees, net of
associated distribution costs, earned on AuM.
Reference FY2024 FY2023
£m
£m
Management fees CSCI 162.6 185.4
Distribution costs CSCI (2.2) (2.2)
Net management fees 160.4 183.2
Net management fee margin
The net management fee margin is defined as the ratio of annualised net
management fees to average AuM for the period, in US dollars since it is the
primary currency in which fees are received and matches the Group's AuM
disclosures. The average AuM excludes assets where fees are not recognised in
revenues, for example AuM related to associates. The margin is a principal
measure of the firm's revenue-generating capability and is a commonly used
industry performance measure.
FY2024 FY2023
Net management fee income (US$m) 202.1 220.6
Average AuM (US$bn) 51.9 57.7
Net management fee margin (bps) 39 38
Variable compensation ratio
The linking of variable annual pay awards to the Group's profitability is one
of the principal methods by which the Group controls its operating costs. The
charge for VC is a component of personnel expenses and comprises share-based
payments and performance-related cash bonuses, and has been accrued at 31.0%
of EBVCT (FY2023: 21.6%).
EBVCT is defined as profit before tax excluding the charge for VC, charitable
donations, share of profit from associate, realised gains on disposal of
investments and unrealised seed capital-related items; and including net seed
capital gains realised in the period on a life-to-date basis. The unrealised
seed capital items are net gains or losses on investment securities, expenses
in respect of consolidated funds and net unrealised gains or losses in finance
income.
The variable compensation ratio is defined as the charge for VC divided by
EBVCT. In prior periods, the VC was accrued as a percentage of EBVCIT, which
excluded interest income, seed capital-related items and tax (FY2023: 25.0% of
EBVCIT).
Reference FY2024 FY2023
£m
£m
Profit before tax CSCI 12.1 111.8
Remove:
Seed capital-related (gains)/losses CSCI, note 20 (21.7) 8.3
Realised gains on disposal of investments Note 8 (5.2) -
Share of profit from associate CSCI (0.5) (0.5)
Variable remuneration 52.9 34.8
Charitable donations 0.6 0.5
Add:
Realised life-to-date seed capital gains 16.1 6.3
EBVCT 170.3 161.2
Adjusted net revenue, adjusted operating costs and adjusted EBITDA
Adjusted figures exclude items relating to FX translation and seed capital.
Management assesses the Group's operating performance by excluding the
volatility associated with these items.
Earnings before interest, tax, depreciation and amortisation (EBITDA) provides
a view of the operating performance of the business before certain non-cash
items, financing income and charges, and taxation.
Reference FY2024 FY2023
£m
£m
Net revenue CSCI 189.3 196.4
Remove:
FX translation (gains)/losses Note 7 (1.5) (1.0)
Adjusted net revenue 187.8 195.4
Reference FY2024 FY2023
£m
£m
Personnel expenses CSCI (85.1) (66.2)
Other expenses CSCI (29.8) (27.8)
Remove:
Other expenses in consolidated funds Note 20 1.4 1.3
Add:
VC % on FX translation Note 7 0.5 0.3
Adjusted operating costs (113.0) (92.4)
Reference FY2024 FY2023
£m
£m
Operating profit CSCI 57.2 77.4
Remove:
Depreciation & amortisation 3.1 3.2
EBITDA 60.3 80.6
Remove:
FX translation Note 7 (1.5) (1.0)
Seed capital-related (gains)/losses CSCI, note 20 18.6 26.3
VC % on FX translation Note 7 0.5 0.3
Adjusted EBITDA 77.9 106.2
Adjusted EBITDA margin
The ratio of adjusted EBITDA to adjusted net revenue. This is an appropriate
measure of the Group's operational efficiency and its ability to generate
returns for shareholders.
Adjusted diluted EPS
Diluted EPS excluding items relating to FX translation and seed capital, as
described above, and the related tax impact.
Reference FY2024 FY2023
pence
pence
Diluted EPS CSCI 13.6 12.2
Remove:
FX translation Note 7 (0.2) (0.1)
Tax on FX translation 0.1 -
Seed capital-related (gains)/losses CSCI, note 7, note 20 (3.2) 1.2
Tax on seed capital-related items 0.2 (0.6)
Adjusted diluted EPS 10.5 12.7
Conversion of operating profits to cash
This compares cash generated from operations, excluding consolidated funds, to
adjusted EBITDA, and is a measure of the effectiveness of the Group's
operations in converting profits to cash flows for shareholders. Excluding
consolidated funds also ensures consistency between the cash flow and adjusted
EBITDA.
Reference FY2024 FY2023
£m
£m
Cash generated from operations Consolidated cash flow statement 112.5 111.6
Remove:
Cash flows relating to consolidated funds Note 20 1.0 0.1
Operating cash flow 113.5 111.7
Adjusted EBITDA 77.9 106.2
Conversion of operating profits to cash 146% 105%
Capital resources
Ashmore has calculated its capital resources in a manner consistent with the
IFPR. Note that goodwill and intangible assets include associated deferred tax
liabilities and deferred acquisition costs, and foreseeable dividends relate
to the proposed final dividend of 12.1 pence per share.
Reference 30 June 2024 30 June 2023
£m
£m
Total equity Balance sheet 882.6 898.8
Deductions:
Goodwill and intangible assets (79.3) (80.0)
Deferred tax assets Balance sheet (18.9) (23.9)
Foreseeable dividends Note 14 (85.1) (85.1)
Investments in financial sector entities (3.1) (5.0)
Capital resources 696.2 704.8
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