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Woodford banks £7.2m as company profits rise 212%

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Woodford banks £7.2m as company profits rise 212%

Profits at Woodford Investment Management climbed 212% between early 2015 and early 2016 to reach £35.45 million as economies of scale on its £14 billion in client assets began to kick in.

After foregoing a profit-share in its first year, company owners Neil Woodford and Craig Newman split £11.08 million, with Woodford taking home £7.2 million, in line with the 65/35% equity split.  

The numbers were contained in accounts for the year to March 31 filed with Companies House. The explosive growth, as Citywire AA-rated Woodford’s legion of loyal investors followed him from Invesco Perpetual, prompted the business to shift from a partnership to a limited company after the period end in May.

While asset growth has inevitably begun to slow the business nonetheless continues to add funds, which rose to £15.3 billion in November.

Operating expenses increased by 47% to £21.7 million from £14.7 million in 2015. 

Turnover for the year rose to £58.4 million from £27.46 million, while staffing rose from an average headcount of 20 in the previous 12 months to an average of 30.  

The period predated the company’s decision to drop bonuses in favour of higher salaries, but a spokesperson for the group said it had not experienced any staff attrition.

Full time staffing costs for the 12 months added up to £5.2 million, composed of £1.5 million in salary versus £3.7 million in bonuses, compared to £2.06 million versus £2.9 million variable respectively in the year before. 

Contract and consultancy costs added a further £1.8 million to that. 

Chief executive Newman said: ‘When we launched we set out to create a fund management company that was transparent, open and offered value for money. Having this at the heart of our culture has driven us to challenge the status quo, with the benefit of agility that comes from having an outsourced business model.

‘We have simplified our remuneration structure and since the start of the current financial year, employees are paid a single salary and we no longer pay discretionary bonuses. We believe the influences more consistent behaviours, which are aligned to the firm’s long-term philosophy and clients’ expectations.’

The period of the accounts covers the £800 million capital raising for the Woodford Patient Capital trust and secured block-busting fund sales, in an otherwise lacklustre year for new investment.

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