GlobeOp Financial Services S.A. ("GlobeOp" or "the Company", LSE:GO.), a leading independent provider of business process outsourcing, financial technology services and analytics to the hedge fund industry and other targeted sectors of the financial services industry, today publishes its Interim Management Statement covering the period since 31 December 2010.
Unless otherwise stated, figures are for the quarter ended 31st March 2011.
Financial Performance Update
Trading for the first quarter was strong. Revenues, adjusted operating profit1 and net income have continued to grow. Assets under Administration (AuA) increased to a record total of $167 billion2 as at 31 March 2011, a 12% increase from $149 billion at 31 December 2010 and a 46% increase in the past 12 months.
During the first quarter, existing clients added new funds with $11 billion of AuA and new clients brought another $1 billion of assets to GlobeOp. In addition, client subscriptions totalled $11 billion for the quarter versus redemptions of $10 billion. Fund performance added $4 billion to client asset balances and the impact of foreign currency exchange rates on non-US dollar-denominated funds resulted in an additional $1 billion increase in AuA. Reflecting the size, scope and workload of the inflows during the period, as well as existing client arrangements entering the year, the average yield of MBA revenue relative to AuA was slightly under 12 basis points during the first quarter.
Hans Hufschmid, chief executive officer, said: "We are pleased with our growth so far this year. In the first quarter, we added new business with our existing clients as well as with new clients. We also signed a new $1.5 billion MBA client (the Kenmar Group), a conversion to the GlobeOp platform scheduled for the second quarter. Costs remain under control and cash flows continue to be strong. In addition, during April we launched the GlobeOp Hedge Fund Index. The Index is a timely, independent and substantial set of data that provides a unique window on capital movements and hedge fund investor sentiment. We anticipate adding further indices this year, including performance measurement. GlobeOp is the first fund administrator to provide this level of data and transparency to the marketplace and it is encouraging to see the positive indositive industry reaction."
The Company's financial position remains strong. Cash totalled $73 million (unaudited) as at 31 March 2011, a $26 million increase, 54%, since March 2010. The Company will make its planned dividend payment relating to 2010 on 26 May 2011 totalling approximately $5.0 million.
Looking ahead, we see a broad array of revenue opportunities and a strong pipeline of new business. We expect the Kenmar Group to commence fund administration services with GlobeOp in the second quarter and we recently won an MBA mandate with another new client which is expected to commence in the late summer with up to $2 billion in AuA. Also during the second quarter, we are scheduled to commence OTC processing services related to a Transaction Solutions contract which was executed with a major European re-insurance specialist in late 2010. As GlobeOp continues to grow we remain focused on client service, cost efficiency and productivity. We are well positioned for additional growth and we are optimistic about 2011.
1 A non-IFRS financial measure that is calculated by the Company as operating profit prior to depreciation and amortisation expense and employee costs related to share-based compensation.
2 Assets under Administration. Consistent with past disclosure the performance of clients' funds for the current month is not included in the measurement of AuA at the end of that month. Thus, March 2011 client fund performance is not within the 31 March 2011 figure.