Board of Directors Changes Dividend Policy
Declares Quarterly Dividend of $0.15 per share payable 28 April 2007
HAMILTON, Bermuda, March 29 /CNW/ -- Following a meeting of the Company's
Board of Directors, W.P. Stewart & Co., Ltd. announced updates to its business
activities in the first quarter of 2007 and announced a change in the dividend
First Quarter Update
Performance in the W.P. Stewart & Co., Ltd. U.S. Equity Composite (the
"Composite") is lagging slightly behind the S&P 500 Index for the year to
date. Preliminary indications are that assets under management ("AUM") as of
23 March 2007 were approximately $7.0 billion, compared with approximately
$8.1 billion at 31 December 2006.
"While these remain challenging times for our Company," Bill Stewart,
Chairman, said, "I am confident we are on the right path to restore our
company's legacy. We have initiated a process of renewal as we explore a
range of opportunities to significantly enhance our business for the future
benefit of our clients and shareholders.
"Most importantly," he continued, "we are focusing our analysts and
managers on achieving absolute returns and have reaffirmed our stretch goal of
15 percent compounded annual returns over a five to ten year horizon. This
goal should be achievable given the quality, growth and the current low
valuation of the companies that make up our investment universe and in which
we invest our clients' accounts. We will also focus on adding more highly
successful investors to our team in the coming year."
The North American investment group has thoroughly reviewed all company
coverage in the U.S. universe, adding two new investment names and removing
two from the universe. In March, the team -- now including Bill Stewart, Bob
Kahn, a founding partner and portfolio manager and Mark Phelps, Managing
Director - Global Investments -- rebalanced the portfolios, placing more
emphasis on the highest quality companies within the universe. The U.S. equity
team will be expanded to nine senior professionals on 10 April 2007, when a
new analyst joins the Company.
As expected following the management changes announced on 1 February
2007, AUM for the quarter to date reflects net outflows of approximately $1.1
billion. Further, there will be additional outflows of at least $325 million
in the current quarter, as one large sub-advised fund notified the Company of
its decision to close their account by 31 March 2007. In commenting on these
developments, Mr. Stewart said; "Virtually all clients have been contacted and
meetings have been held or scheduled with many. While it is too soon to say
what the final flows will look like this year, I am encouraged by the general
response of many of the clients we have met with recently. Our sense is that
many of the balance of our clients, especially those high net worth clients
with whom we have worked for many years, remain committed to sustaining their
relationships with W.P. Stewart."
During the month of February 2007, the Company entered into agreements
with certain employees whose employment with the Company terminated in the
first quarter. In accordance with the terms of these agreements, the Company
will incur one-time, non-recurring cash expenses of approximately $1,600,000
and non-cash charges related to restricted shares of approximately $4,200,000
in the first quarter of 2007. Combined, these one-time, non-recurring charges
will equate to approximately $0.11 per share, diluted, on a tax effected basis
and will reduce first quarter earnings accordingly.
Change in Dividend Policy
The Board of Directors has decided to change the way the Company pays its
dividend, moving from the historic pattern of four equal quarterly amounts to
a new policy of paying lower amounts in the first three quarters and a final,
fourth payment in January, based on cash earnings for the year, including any
performance fees received in the fourth quarter.
This new policy allows the Company better to cope with the
unpredictability associated with market appreciation, which is always hard to
forecast in the short term and the related uncertainty about the amount of
performance fee income for the year. As always, the Board will continue to
review the dividend on a quarterly basis and while non-recurring cash charges,
extraordinary transactions and other developments could affect the amount of
the dividend payment in any quarter, the Company's long-standing policy of
paying dividends approximating substantially all its yearly cash earnings
remains in effect.
Reflecting the new policy, the Board today declared a regular quarterly
dividend of US$0.15 per common share, payable on 28 April 2007, to
shareholders of record on 14 April 2007.
Mr. Stewart noted the Company continues to develop new growth
opportunities. "Internationally," Mr. Stewart continued, "with a global
investment platform in place, we are developing our global and regional
investment services as a complement to our traditional U. S. equity services,
positioning W.P. Stewart where investment management demand is rising
strongly, and which we anticipate will be a very profitable business over the
next several years.
"In summary, we are working hard to reestablish and strengthen
relationships with our exceptional client base and to focus investment
management on our proven investment philosophy. I appreciate the support our
clients have shown the firm and look forward to repaying their loyalty with
strong investment results over the longer-term."
W.P. Stewart is an asset management company that has provided research-
intensive equity management services to clients throughout the world since
1975. The Company is headquartered in Hamilton, Bermuda and has additional
operations or affiliates in the United States, Europe and Asia.
The Company's shares are listed for trading on the New York Stock
Exchange (NYSE: WPL) and on the Bermuda Stock Exchange (BSX: WPS).
For more information, please visit the Company's website at
http://www.wpstewart.com, or call W.P. Stewart Investor Relations (Fred M.
Ryan) at 1-888-695-4092 (toll-free within the United States) or +441-295-8585
(outside the United States) or e-mail to IRINFO</B>wpstewart.com.
Contact: Fred Ryan
For further information:
For further information: Fred Ryan, W.P. Stewart, +1-441-295-8585 Web