EVOLUTION GROUP has pledged to continue to return money to its shareholders after criticism elsewhere in the City of the huge cash balances that the investment bank has built up from various disposals of investments.
Alex Snow, the chief executive, said that cash returns by means of share buybacks were one of three uses for the money, which will increase to well above £100 million by the end of 2006.
He has the sanction of shareholders to return as much as £50 million to them this autumn, but could also spend the money on acquisitions and on growing the existing business.
In June Evolution carried out an unusually structured purchase of Williams de Broë, one of the City’s longest-established brokers and fund managers, which will mean it paying an equivalent sum to the cash balances within that business once these have been assessed. Mr Snow said that he expected the eventual consideration for the broker, which had been suffering severe management problems, would be less than £10 million.
The company was reporting interim figures to end-June that showed pre-tax profits, stripped of one-off disposals, rising by £1 million to £17 million and a dividend up from 0.4p to 0.5p.
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Mr Snow said that the purchase of Williams de Broë, and the natural organic growth from that side, would lead to asset management providing about a third of revenues. The company would then be less reliant on income from stock market flotations, which have reduced significantly since the market turbulence of the summer. “The corporate pipeline looks very healthy,” he said.
Martin Gray, the chairman, said: “Overall, despite the rather more difficult conditions of recent months, progress has been maintained and the group is trading in line with expectations.”