A wealth management group has dumped its previous earnings guidance, indicating the pandemic-driven market weakness will drag its fund management and wealth advice revenue.
Evans Dixon made the call to withdraw its previous guidance due to the increasing level of uncertainty from COVID-19, signalling its financial performance will be negatively impacted in the near term as a result of the substantial drop in value across global markets.
The group had seen a significant increase in trading activity by clients of both its Evans & Partners (E&P) corporate advisory and wealth advice divisions over the last two months, generating “strong” brokerage revenues.
However, revenue in the wealth advice segment is expected to lag on the back of a substantial reduction in the market value of funds under advice.
Further, in funds management, Evans Dixon anticipates its revenue from managing equities portfolios will bear a significant negative impact due to the market downturn.
It added the E&P division revenues are also set to be affected in the near term by the effect of market uncertainty on corporate advisory activity levels.
The group has remained somewhat optimistic, stating its operating model remains “relatively robust” under the social isolation regime required in response to the coronavirus.
The company board reaffirmed its previously declared interim dividend of 2.5 cents per share, to be paid on 14 April.
Evans Dixon recently revealed it had dumped a fifth of its staff during the first half year, as part of the group’s overhaul.
During the six months leading up to December, the troubled wealth group had conducted phase one of its operational review, which included the closure of its custody business, Dixon Projects Australia, and a wind-down of funds in the US.
The reforms also included staff cuts with the group dropping 123 employees over the half down to a new total headcount of 601.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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