F&C to pare costs again after profits dip but plans no job cuts

ASSET manager F&C yesterday announced plans to cut a further £3 million in costs as it reported a dip in first-half profits, but its Scottish operations look set to escape any job cuts.

The group, which employs about 130 people in Edinburgh, also said assets under management fell to £98.2 billion in the six months to the end of June, down from £108bn a year ­earlier, amid “challenging” ­market conditions.

Pre-tax profits dipped to £21m, from £22.6m at the half-way stage last year and the interim dividend was held at 1p.

Peel Hunt analyst Stuart Duncan said the figures showed F&C had made “significant progress” with a strategic review that it launched last year.

Edward Bramson, who was appointed executive chairman last year following the retirement of chief executive Alain Grisay, said F&C had benefited from gains in its institutional business and higher cost savings.

In May, the asset manager said it planned to extend its range of investment trusts and continue cost-cutting measures. Yesterday, it revealed that its cost savings target had risen by £3m to £48.8m, but a spokesman said there would be no redundancies in Scotland as a result.

F&C said its search for a new chief was continuing, and it hopes to have appointed a successor to Grisay in time for its annual meeting next year.

Rival Jupiter Fund Management also reported a small drop in assets under management to £23.4bn yesterday, down from £24.8bn for the first half of 2011. The firm said it had benefited from strong investment returns and positive flows of money into its mutual funds, and its ­operating margin remained above 50 per cent.

F&C’s underlying operating margin rose to 26.7 per cent in the first half, from 24 per cent a year ago, and Bramson said the firm was confident that it would improve further as a result of its latest cost-cutting exercise.