Record profits at Ashmore, though margin eases

13th Sep 2011 07:35

The year to the end of June saw assets under management (AuM) and profits hit record levels at asset manager Ashmore Group, though the former was boosted by the takeover of Emerging Markets Management (EMM).Profit before tax rose 13% to £245.9m from £217.2m the year before, on total net revenue that rose 17% to £333.8m from £286.2m. Peel Hunt has predicted profit before tax of £249m on revenue of £341m.Net management fees rose by 31% to £249.3m while performance fees edged up 3% to £85.4m.AuM at the end of June stood at $65.8bn, an increase of 86% from $35.3bn the year before. The gain comprised net subscriptions of $15.5bn, investment performance of $5.1bn and $9.9bn through the EMM acquisition. Overall gross subscriptions totalled $23.0bn with the group especially pleased with the strong response to an Asian retail multi-strategy fund in the first half. Gross redemptions rose to $7.5bn from $3.7bn the year before, but the group noted this was in part because of its "absolute growth in scale".The operating profit margin eased to 72% from 73% the year before.The company expects this to drop to sub-70% levels next year in view of its growing scale and the recent EMM acquisition.Basic earnings per share advanced to 28.1p from 23.9p. A final dividend of 10.34p has been declared, making a total for the year of 14.5p, up from 13.0p last year, and bang in line with Peel Hunt's forecast."The opportunity for raising AuM from both developed country and emerging markets sources as they increasingly come to realise the attractiveness of the emerging markets asset classes over developed markets alternatives, remains a compelling one. We remain confident of further progress in the years to come," said Ashmore's Chief Executive Officer, Mark Coombs.In the new financial year, unaudited annual performance fees for the funds with performance years ended 31 August 2011 were £18.8m, versus £43.5m a year earlier. --jh