Ninety One PLC and Ltd on Wednesday described operating conditions in the first half of its financial year as ‘extremely challenging’, as net outflows worsened and profit declined.

The London and Cape Town-based money manager said pretax profit dropped 6.0% to £104.0 million for the six months that ended September 30 from £110.6 million a year earlier.

Net revenue was 9.1% lower at £294.3 million from £323.8 million.

Assets under management as at September 30 was £123.1 billion, down 5% from £129.3 billion as at March 31, reflecting market volatility, as well as net outflows in most regions, Ninety One said. AuM declined 7% from £132.3 billion at September 30, 2022.

In the first half, Ninety One experienced net outflows of £4.3 billion, compared to net outflows of £3.2 billion a year before.

Sharply rising long-term interest rates and geopolitical risks had continued to damp investor risk appetite, the company said.

Ninety One declared an interim dividend of 5.9 pence, down 9% from 6.5p. Earnings per share and headline earnings per share both decreased 5.3% to 8.9p from 9.4p.

Chief Executive Officer Hendrik du Toit said equity markets had been driven by narrow sectoral and geographic performance. ‘These factors have dampened investor appetite for emerging markets and public equities in general. We expect these conditions to remain for the rest of the financial year,’ he said.

Going forward, Ninety One warned that its working assumption is that it will be operating in challenging markets for some time to come.

But it noted that it sees ample long-term growth opportunities ahead in spite of current market conditions and a rapidly changing world.

Ninety One shares in London were 0.2% lower at 175.50 pence on Wednesday morning. They also were down 0.2%, to R 39.76, in Johannesburg.

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