Neil Woodford and his business partner raked in £13.8m in dividends before their funds empire collapsed leaving investors facing big losses
- Investors were already deserting the fund, causing slump in profit and revenues
- Annual results statement blames ‘underperformance’ and ‘negative press coverage’ for ensuing fund suspension
- The debacle has left hundreds of thousands of investors facing losses
Neil Woodford: Fund manager has reportedly travelled to China to drum up interest from investors in early stage businesses
Disgraced fund manager Neil Woodford and his business partner Craig Newman scooped £13.8million in dividends from their investment business before its collapse.
The figure for the financial year 2018/19 compared to the £36.5million that the pair took out of Woodford Investment Management in the 2017/18 year.
Investors in the the flagship equity income fund were already deserting the fund in droves in early 2019, resulting in a slump in profits and revenues.
The results statement for 2018/19 blames ‘underperformance’ in the Woodford equity income fund and ‘a period of sustained and negative press coverage’ for the eventual suspension of the fund last summer.
The debacle has left hundreds of thousands of investors facing losses on their holdings.
The company results, which cover the 12 months to 30 March 2019, reveal that Woodford’s boutique asset management firm made a £18.4million pre-tax profit, down from £41.7million the year before. Revenues fell to £52.6million, from £78million in the prior year.
In a statement on ‘post balance sheet events’, the company says that measures are being taken to reshape the business in light of reduced revenue expectations with a view to remaining debt free, with no intention or need to raise capital from other sources.
A company spokesperson said: ‘The accounts relate to the financial year before the equity income fund was suspended.
‘We can confirm that the partners did not take any profits or income during the fund’s suspension nor was any management fee earned from managing Woodford Patient Capital Trust.’
Woodford was ousted from his main fund last autumn and it is now being wound up with proceeds due to start being distributed to investors from the middle of this month.
Meanwhile, the smaller Woodford Income Focus fund has been taken over by Aberdeen Standard Investments, and Woodford Patient Capital Trust by Schroders Investment Management.
Woodford himself has reportedly travelled to China to drum up interest from investors in early stage businesses, in what is assumed to be an attempt to resurrect his career.
Woodford Asset Management changed its registered place of business from an Oxford business park to an address in Old Gloucester Street in London in mid-December.
There is widespread anger over Woodford’s management of the equity income fund, and his decision to take some £8.6million in fees between its suspension in June and the decision to wind it up.
Investors are understood to be considering legal action against online investment broker Hargreaves Lansdown, which has been heavily criticised for keeping the Woodford fund on its ‘best buy’ lists up until its suspension in June.
A third legal firm, Nelsons, has joined Leigh Day and Slater & Gordon to confirm it is exploring action against Hargreaves.
Administrators of the equity income fund – which has had Woodford stripped from its name – said at the end of last year that £1.65billion had been raised from the sale of 56 per cent of the fund to date, meaning investors had lost 19 per cent since they were frozen in at the start of summer.
Link Asset Services said investors would be told what they would receive in their first payout on January 13.