After a record-breaking year, Legg Mason Inc. yesterday gave its shareholders a present - it split its stock three for two and increased its dividend by 50 percent.
"We had a very good year," Raymond A. "Chip" Mason, Legg's chairman and chief executive, told about 90 employees and investors at the Baltimore-based asset manager's annual meeting yesterday.
"We think it is the least we could do."
"I hope we are back here next year with a new record and new highs in profits and assets under management," Mason said.
Mason told shareholders that overseas expansion, especially in Asia, is critical for growth. Legg Mason has an office in Singapore and will likely open one in Tokyo because of the "sheer size of the market."
"The growth rates outside the United States are higher than they are inside the United States," Mason told shareholders.
Legg Mason manages money in about 70 countries for governments, corporations and individuals and its overseas business is growing rapidly, but the domestic operations continue to drive its record-setting results.
Indeed, Legg's performance has been impressive.
Net revenue has grown at an annual rate of 15 percent over the past five years to $1.9 billion as of March 31, the company's fiscal year-end. During the same period, net income has grown at a 26 percent clip, assets under management have climbed by 26 percent and earnings per share have grown by 22 percent to $4.06.
At fiscal year's end, net revenue, net income, assets under management and earnings per share stood at record levels.
"It has been a great year for us," Mason said yesterday. "We continue to grow in size and prominence worldwide."
What's more, in the past 10 years the company's stock has had an annual average return of 25 percent. On Monday, Legg's shares lost $7.25 on weaker-than-expected earnings and closed at $75.55. Yesterday, they rebounded, gaining $4.36 to close at $79.91.
"The shareholder, we think, has been treated well," Mason said.
Faith Dean, 73, a Legg Mason stockholder who attended the meeting, said the company has "tremendous potential for growth."
"As a matter of fact, I am going to buy more stock today," the Baltimore resident said.
Split payable Sept. 24
Legg's three-for-two stock split is payable on Sept. 24, to shareholders of record as of Sept. 8.
The quarterly cash dividend of 15 cents per share on a split-adjusted basis will be payable on Oct. 25.
Mason said the company isn't perfect and problems come up.
"We've had issues that you are going to have; that is the problem of running a business," Mason told shareholders. "I can assure you we are doing the best we can."