US/UK - Amvescap, the Anglo/US fund manager, cited the worst bear market for 65 years as pre-tax profits plunged 33% in 2002.
Profits stooped to £320.9m (US$516.6m) last year and total funds under management fell to around £207m, a drop of 16%.
Amvescap was hit by an exceptional charge of £69.2m resulting from a cost reduction program aimed at cutting expenses by US$150m by the end of 2003. The company also holds 50% of its assets in equities which have also suffered huge losses.
Charles Brady, executive chairman of Amvescap, said: “We reduced expenses in a controlled manner throughout 2002 while maintaining our breadth of product,distribution capabilities and quality of service.”
He added: “We achieved fundamental change that has strengthened the firm and will benefit us in the future.”
The Invesco institutional group reported revenues and operating profits of £199.2m and £49.3m respectively in 2002 (£211.9m/£49.3m - 2001). The group generated approximately US$20.2bn in gross sales during 2002; market declines and net redemptions were US$8.4bn and US$5.7bn respectively for the year. Funds under management amounted to US$102.9bn at December-end. Invesco’s global business posted profits of £33.9m compared to £76.4m in 2001.
Brady posted a cautious outlook for 2003.
“The global economic and political climate contains many uncertainties that are directly affecting the capital markets and our business,” he said.
“The worst bear market in over 65 years has badly eroded investor and business confidence, and it will understandably take some time to restore this confidence after the markets have stabilised. As we enter 2003, Amvescap will continue to maintain our focus on the business fundamentals within our control... .”
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