GAM (GAM) H1 2024 earnings summary

Executive summary

• IFRS net loss after tax for H1 2024 was CHF 39.1m, a 45% improvement from CHF 71.2m loss in H1 2023, mainly due to lower non-core charges and reorganisation costs.

• Significant progress on turnaround strategy, focusing on core investment and wealth management, cost optimization, and sale of third-party fund services business.

• Strategic alliances with Sun Hung Kai & Co. and new hires to expand in Greater China and strengthen teams.

• Launch of new alternative investment products and partnerships, including with Avenue Capital and Bruellan SA.

• Targeting profitability in fiscal year 2026, supported by a fully underwritten rights issue and ongoing support from anchor shareholder.

Financial highlights

• Assets under management (AuM) at CHF 19.0bn as of June 30, 2024, down from CHF 19.3bn at year-end 2023, reflecting net outflows of CHF 1.8bn.

• IFRS net loss of CHF 39.1m for H1 2024, a 45% improvement from CHF 71.2m loss in H1 2023.

• Underlying loss before tax increased to CHF 33.2m from CHF 22.5m year-over-year.

• Net management fees and commissions fell 39% to CHF 41.6m, mainly due to the sale of the fund services business and lower AuM.

• Overall net outflows of CHF 1.8bn in H1 2024, despite positive inflows in European Equity and select strategies.

Outlook and guidance

• Focus remains on achieving sustainable positive net inflows by rebuilding distribution and launching new products.

• Profitability targeted for fiscal year 2026, contingent on successful strategy execution and market conditions.

• Management expects further cost reductions from the transfer of ManCo activities and continued investment in client-facing and investment management teams.

• A fully underwritten CHF 100m rights issue is planned for Q3 or early Q4 2024 to repay debt and strengthen capital.

• Directors concluded that the going concern basis is appropriate due to new financing and the upcoming rights issue.