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Amidst falling profits and complaints over high fees and investment recommendations for its own in-house funds, financial advisory firm Evans Dixon (ASX: ED1) will see its CEO Alan Dixon (pictured) step aside to focus on the company's US residential property fund.
Executive chairman David Evans will act as a temporary CEO while an executive search process gets underway, and Dixon will remain an executive director.
When the announcement was made after the market's close yesterday ED1 shares were trading at $0.80. This is a sharp contrast to the $1.55 share price in mid-May and the $2.50 level after the firm's IPO in May 2018.
The May freefall was a response to an EBITDA forecast of $35-38 million for FY19, which surprised the market given the Sydney-based firm notched a profit of $50.1 million in FY18 and had even managed a 6 per cent improvement in the first half.
At the same time, Evans Dixon's US Masters Residential Property Fund (ASX: URF) has seen its share price fall by almost half in the past 18 months, and in its strategic review dividends were cut by 80 per cent.
Will Dixon be able to turn the tide on the other side of the Pacific?
"This move provides an opportunity for Alan to concentrate on implementing the outcome of the URF strategic review," says Evans.
"With his sole focus in the US for the foreseeable future, the Board and Alan agreed that identifying a new high calibre Chief Executive Officer for Evans Dixon made sense.
"While there are areas in the Evans Dixon business where we must and will improve performance, there have been many achievements for our business so far this year, and we remain focused on ensuring client expectations are met."
Evans notes that over the four months to the end of April ED1 grew its funds under advice (FUA) and funds under management (FUM) by 13 per cent, supported by positive net client growth, new fund raisings and positive investment markets.
He highlights the Evans & Partners International Focus Portfolio was ranked number one out of 122 funds by Zenith over 12 months to 30 April with a 31 per cent return to clients, while the company's Global Disruption Fund returned 17 per cent over the same period.
"In April, we listed our first offshore fund on the London Stock Exchange, the US Solar Fund (USF), raising US$200m from institutional and sophisticated investors to invest in US solar energy infrastructure via our existing New Energy Solar team," says Evans.
"Additionally, our Corporate and Institutional business is performing well, continuing to increase its market share in institutional equities and maintaining an encouraging transaction pipeline.
"Overall, we look forward to executing on the opportunities that present themselves across our business."
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