Financial Results
Takeover-Targeted GAM Says Impairment Hits Q1 Result
The rise in the IFRS net loss after tax was caused by a SFr48.6 million non-cash impairment charge in respect of the “brand intangible.”
GAM Holding, the
Zurich-listed fund manager which is the subject of a takeover
bid by the UK’s Liontrust, said an
impairment to its brand affected its financial results in the
three months to end of March this year.
The firm said it logged an underlying pre-tax loss in
Q1 2023, at SFr11.2 million ($12.24 million) compared with
an underlying pre-tax loss of SFr10.6 million a year earlier. On
an IFRS basis, the net after-tax loss in Q1 was SFr63.2 million
from SFr7.8 million.
The rise in the IFRS net loss after tax was caused by a SFr48.6
million non-cash impairment charge in respect of the “brand
intangible.” The impairment reflected the drop in the
company's share price from 31 December to the end of March,
according to the statement yesterday.
As previously reported on 4 May, GAM’s total assets under
management were SFr71.7 billion as at 31 March 2023, down from
SFr75.0 billion at 31 December 2022.
In response to the recent request by a shareholder – Rock
Investment SAS – GAM is planning to hold an extraordinary general
meeting on 25 August 2023. Rock has asked GAM to consider firing
its board and making other changes. Rock Investment SAS
(part of the investor group comprising Newgame SA and Bruellan
SA) holds 5.11 per cent of GAM shares.
GAM has been battling to recover its fortunes since Tim Haywood,
who managed the ARBF business, was suspended in 2018 amid claims
of misconduct (he was subsequently dismissed). Clients pulled
money out of the firm. GAM has also seen its fortunes hit by the
selloff in global markets during 2022. In January 2023, GAM said
it expected to report an underlying pre-tax loss of about SFr42.8
million ($46.5 million) in 2022, widening from a loss of SFr9.6
million a year earlier.
The takeover proposal comes at a time when the asset management sector, pressured by continued compliance costs, volatile markets and changing investment models, is looking at ways of building economies of scale and shedding costs.
