This is the first set of results since the completion of the de-merger from Friends Provident earlier this year, and F&C Asset Management has been left under no illusions about how tough the investment climate remains.
Assets under management (AUM) fell from £96.5bn a year earlier to £88.3bn, net revenues slumped 11 per cent to £105m and group underlying operating profits slid from £30m to £19m. The net result was a collapse in adjusted EPS from 4.2p to just 1p. F&C operates a well-diversified business across a range of asset classes, but around 84 per cent of the decline in revenues were attributable to unfavourable market and currency movements, rather than business flows or investment. As chief executive Alain Grisay points out, the FTSE 100 is still trading well below the levels seen in the first half of 2008 even after the recent surge in share prices.
Around 58 per cent of the investment portfolio was denominated in euros at the start of the year, and despite the use of forward contracts on around 50 per cent of euro-denominated cash flows, the euro's weakness against sterling reduced sterling AUM by £6.6bn. On a brighter note, institutional outflows slowed to £2.5bn, while new business sales more than doubled to £1.5bn. And Mr Grisay expects sales to accelerate now that the uncertainty over the group's ownership is out of the way.
More analysis of company results
| F&C ASSET MANAGEMENT (FCAM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 73p | MARKET VALUE: | £356m | |
| TOUCH: | 73-74p | 12-MONTH HIGH: | 106p | LOW: 29p |
| DIVIDEND YIELD: | 8.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 112p* | NET DEBT**: | 19% | |
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2008 | 3.4 | 0.61 | 2.0 |
| 2009 | -11.3 | -1.99 | 2.0 |
| % change | - | - | - |
Ex-div: 30 Sep Payment: 23 Oct *Includes intangible assets of £826m, or 170p a share **Excludes policyholders cash | |||
