Hunter Hall foreshadows lower dividends and extra costs after Peter Hall's resignation

World Solar Challenge in Adelaide. Morne de Klerk/Getty Images for World Solar Challenge

The departure of ethical investing pioneer Peter Hall, the founder of Hunter Hall, will cost the company between $2 million and $2.5 million.

However, overall operating expenses for the half year to June this year are expected to be lower.

The Sydney-based business also warned today that the interim dividend for the half year ending December is likely to be lower than the dividend policy of 100% of net profit after tax.

A short time ago, Hunter Hall shares were down 1.2% to $2.41.

In a market update, the company says its expects extraordinary expenses relating to Hall’s resignation and in response to a subsequent takeover offer from Washington H. Soul Pattinson & Co.

Washington H. Soul Pattinson is making a cash takeover bid at $1 a share for the company. Hall, the biggest shareholder, says he will sell his 43% holding to Soul Pattinson.

After starting the funds management business 22 years ago, Hall says he’s now 56 and wants to to spend more time with his family and pursue “personal interests”.

Hunter Hall expects revenue for the half year to December to be 4% higher than the $8.374 million in the same period last and expenses to be 1% lower than the previous $5.077 million.

Operating Profit before tax for the six months is expected to be 13% higher than the $3.297 million recorded in the same period last year.

However, the company says it did not earn performance fees or realise gains on its investment portfolio over the six months.

That means interest and dividend income from Hunter Hall’s investment portfolio and will be about 90% lower than the $2.481 million recorded in the six months to December 2015.

Funds under management were $1.033 billion from which $63 million in distributions was paid, resulting in closing funds under management of $970 million at the end of December. Funds under management as at close of business Monday this week stood at $987 million.

Hunter Hall is due to release its audited results for the six months late in February.

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