UK - Edinburgh Fund Managers (EFM) profits' have taken a dramatic plunge, falling from £8.6m to just £1.6m in 2001, with chairman John Wright warning that whilst the first few months of the year were encouraging, "investment and trading conditions remain challenging".
Excluding £3.7m worth of goodwill and exceptional items, EFM’s 2001 pre-tax profits fell from £12.5m to £6.5m. Assets under management fell to £7.1bn from the £8.6bn registered in 2000.
Administrative costs proved to be an additional burden, with costs rising from £25m to £31.9m, primarily driven by £3m worth of exceptional items. On top of that, turnover fell 4% to £34.9m.
The beleaguered investment house - which saw institutional business levels fall 6% to 27% of its total operations - has even been forced to cut its full year dividend by half, leaving it at 12.5p.
Despite the poor performance figures, there were some positive signs. Gross new business amounted to £464m, whilst revenues as a percentage of funds under management increased by 10% to 0.46%.
Following the aborted takeover bid by Hermes earlier this year, EFM claims that it is looking to build up its business by focusing on higher margin activities; multi-manager funds, venture capital funds and private clients, whilst achieving cost efficiencies.
Additionally, Wright said that whilst the firm was looking forward to a period of stability, it was “examining ways in which we can work constructively together” with the BT-owned fund management house. Hermes owns 29.3% of the firm.
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