F&C sees profit rise on cost-cutting drive


F&C Asset Management has reported a rise in underlying profit following its ongoing cost cutting programme and increases in management and performance fees.

The asset management house has posted a group underlying profit before tax of £37.3m for the six months ending 30 June 2013, its unaudited financial results show.

This is up 68.8 per cent from the £22.1m reported one year earlier. F&C’s underlying operating margin has been lifted from 26.8 per cent to 37.6 per cent over the past 12 months.

The company has been implementing a cost reduction plan for the past couple of years, which saw a number of jobs go, and refocusing its consumer and property business activities. In March, executive chairman Edward Bramson said the group’s restructuring programme was “substantially completed”.

F&C chief executive Richard Wilson says: “These are solid results which demonstrate the significant progress being made in delivering the company’s strategic objectives. The 66 per cent increase in our earnings per share, to 4.8p, was driven by a combination of increased revenue, together with the delivery of planned cost reductions.

“Our consumer and institutional business has generated positive net inflows and, with a much strengthened new business pipeline, there are encouraging signs for flows in the second half of the year.”

The group’s assets under management declined from £98.2bn in June last year to £92.3bn -reflecting the previously announced loss of £6bn in fixed income assets from Friends Life.

F&C’s reports net inflows of £200m into its retail business over the six-month period, while its third-party institutional arm witnessed a £500m net inflow. However, its whole business saw a net outflow of £300m.