IOOF flags flat profits

IOOF has said that market movements will leave profits flat this year, and EPS should therefore fall slightly, but there's nothing surprising – or concerning – in that.

IOOF Holdings has 'warned' that lower average market levels this financial year will lead to lower funds under management, administration and advice (FUMA), and that this will leave underlying net profit broadly flat, at $173m–176m compared to $174m last year. That'll probably lead to earnings per share falling 2–3% due to the higher number of average shares on issue (shares were issued to buy Shadforth in August 2014, a month into last financial year). None of this should really come as a surprise, but it appears the market was still expecting earnings per share to be flat and has therefore made its traditional knee-jerk reaction to a profit warning, which is to knock the share price down by the amount of the downgrade (a touch more in fact).


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