The two founding directors of Woodford Investment Management were paid total dividends of £13.825m in the company’s most recent financial year despite a profit plunge and well publicised woes at the company.

The company, which has wound up or transferred its funds after poor returns and negative press coverage, paid approximately £8.9m to founder and chairman Neil Woodford and £4.9m to chief executive Craig Newman.

Between them the two own all the shares in Woodford IM which is owned by parent Woodford Capital. Woodford Capital received the dividends.

Figures filed at Companies House this week for the year ended March 2019 revealed that the profits and turnover were well down in the year.

Despite the problems the Companies House filing suggests the firm will continue as a going concern for the forseeable future while it is ‘re-shaped.’ The directors say there is no need at present to seek outside capital and the business will continue to operate.

Turnover in the year dropped from just over £78m to £52.64m. Pre-tax profits fell from £33.7m to £16.27m. Dividends paid were also lower, down from the £36.49m paid the previous year.

During the year staff numbers rose from 45 to 51 with the number of investment management staff doubling from 4 to 8 and the number of admin staff up from 22 to 36 but the number of distribution staff was down from 19 to 7. Wages and salaries rose from £10.4m to just over £11m.

The firm was beset in 2019 by a wave of poor returns, fund suspensions, mass redemptions by disgruntled investors and negative press coverage.

The company blamed much of its misfortune on under performance and bad press coverage but despite the problems the company states it has sufficient capital to continue operating for the ‘forseeable future.’ As of March 2019 the company had nearly £2m in cash (down from £3.2m the previous year).

In the report and accounts, a note on Post Balance Sheet Events states: “Under performance in the Woodford Equity Income Fund (WEIF), combined with a period of sustained and negative press coverage, has resulted in an intensified redemption profile that prompted Link Fund Solutions (Link), the fund’s Authorised Corporate Director (ACD), to suspend trading in the fund at the start of 2019.

“The decision was taken by Link and approved by its Depository (Northern Trust) to protect investors and give them time to re-shape the portfolio into more liquid investments. In addition a number of mandates have been withdrawn. Measures have been taken to re-shape the business in light of the reduced revenue expectations with a view to remain debt free and with no intention to raise capital from other sources.”