Coronation Fund Managers said on Tuesday it managed to eke out a minor profit in its half year to end-March despite a R716 million tax hit, while it also managed to grow its assets under management.
The group said profit crashed 97% to R22 million for the period, with assets under management growing 9% to R623 billion, although outflows represented about 5% of its average AUM.
The firm said it had to contend with a shrinking savings pool, but added that over 95% of its portfolios have outperformed their benchmarks since inception.
“We are particularly encouraged by the performance of our global portfolios over the last 12 months,” it said.
“We remain of the view that the above macro shocks have created attractive stock-picking opportunities for those investors prepared to take a long-term view.”
The company, however had to make the R716 million provision due to a battle with the South African Revenue Service (SARS) over whether the profits of its business in Ireland should be included in its SA taxable income.
In February, the Supreme Court of Appeal (SCA), which had to decide whether the company’s Irish business qualifies for the tax exemption, ruled in favour of SARS. This prompted Coronation’s shares to crash by more than double digits, wiping out more than R1 billion in shareholder value.
READ | Coronation bleeds after court rules it must pay large tax bill
Excluding this impact, the company said its fund management business would have booked earnings of 191.5c to end March, compared to fund management earnings of 214.8c.
It said on Tuesday that, amid an appeal before the Constitutional Court, it is “firmly of the view” that the Supreme Court erred in its judgement.