More dividends for Coronation shareholders

Company declares a final dividend, over and above the special dividend in September after it won a tax battle with Sars.

Cape Town-headquartered fund manager Coronation reported an 11% jump in total assets under management, to R667 billion, for the year ended 30 September 2024 on Tuesday.

Fund management earnings per share rose 9% to 402.9 cents after excluding the impact of a dispute with the South African Revenue Service (Sars), which it won earlier this year.

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Read: Coronation wins protracted tax battle against Sars

As a result of the outcome, Coronation paid a special dividend of 153 cents per share to its shareholders in September 2024.

In addition, a final gross dividend of 228 cents per share has been declared for FY2024 from income reserves, Coronation said on Tuesday.

The group’s share price firmed around 3% in early morning trade to R39.97.

In June this year, the Constitutional Court ruled in favour of Coronation in a matter concerning the asset manager’s international operations.

The dispute originated in 2012 and related to South Africa’s controlled foreign company rules and the foreign business establishment tax exemption.

Read:
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In the year under review, global markets delivered solid returns, despite geopolitical tensions.

“In South Africa, asset returns have been robust, fuelled by growing optimism that the new government of national unity will deliver much-needed reforms and unlock economic growth,” it noted.

Coronation said 92% of its funds across the business have outperformed their benchmarks since inception.

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Continued outflows

Coronation said that its investment in its client service systems, including technology and data management, was instrumental in efficiently managing the “heightened level of withdrawals” that accompanied the roll-out of the two-pot retirement system on 1 September this year.

It reported net outflows of 8.1% of average assets under management during for FY2024.

Read:
Over R49.5bn in two-pot withdrawals, says the taxman
Two-pot reform: Resist the urge to access your RA savings

“The South African savings industry remains cash-flow negative, and, as a major industry player, Coronation is likely to continue experiencing outflows reflective of the broader environment,” it said.

“We anticipate this trend will persist as long as a weak economy and the high unemployment rate continue to limit people’s ability to save and invest,” the group added.

Listen: How the two-pot system will impact your retirement

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