Lyons grows asset management

Posted On Wednesday, 27 February 2002 03:01 Published by
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PROPERTY asset management group Lyons Financial Solutions Holdings has boosted assets under its management more than 50% to R4,5bn.
PROPERTY asset management group Lyons Financial Solutions Holdings has boosted assets under its management more than 50% to R4,5bn.

This explained the growth of cash generated by the group in the six months to November 30 last year by more than 500%.

Cash generated from operating activities during this period came at R11,6m from R1,7m of the previous comparable period.

This kind of growth is expected to characterise companies like Lyons in the next few years because property asset management is becoming fashionable.

The group produced attributable earnings of R6,37m on fee income of R14,5m. This represented a margin of 44% compared to a 30% margin of the previous period. Headline earnings a share increased by 19% to 1,7c.

CE Garry Fromentin said: 'Unlike conventional asset managers who charge a flat fee for the size of assets under management, we have to work for our fees by adding value to our clients' property portfolios.' T

he R4,5bn in assets under management is a fraction of the market potential, said Lyons financial officer, Ian Hewett. 'We estimate the corporate and institutional property portfolios in SA at about R60bn, with a further R150bn in the public sector. We are just scratching the surface.'

Lyons earned R2,5m from its 45% share in the Lyons Corporate Lease Fund, a fund with R275m in property assets under management. The group said it was working on deals which would boost the fund to R700m. Lyons hold about 40% of this fund but plans to reduce its holdings to 10% over the next 12 months to allow expansion of shareholder base. It plans to list this fund on the JSE Securities Exchange SA later this year.

Lyons Asset Management, the traditional backbone of the business, signed on several big clients during the period under review, including the Gauteng Department of Public Works. Other clients include Clover, Ericsson, MGX, Nestle, Chemserve, Unilever, 3M, Proctor & Gamble, Aspen, and Plascon.

Fromentin said growing the size of assets under management was not a primary business goal.

'We want to assist clients in improving their return on assets and this often requires a reduction in the size of their property portfolios,' said Fromentin.

Lyons share price closed unchanged at 10c on the JSE Securities Exchange SA yesterday.

Publisher: Business Day
Source: Business Day

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