£7.9m profit for F&C but assets fall again
The investment house, which runs a number of investment trusts from Edinburgh, revealed profits before tax of 7.9 million compared to a loss of 29.2m in the same period last year.
Assets under management fell 2.7 per cent to 101.3 billion after the company faced outflows from its institutional and insurance businesses.
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Hide AdF&C said the fall in funds represented further declines in the Netherlands and a dip in insurance business.
Other institutional business picked up while UK retail sales of open-ended funds rose by 23 per cent in the first half.
F&C halved the interim payout to shareholders to 2p a share, and said efforts to boost earnings by launching funds charging higher fees were on track.
Chief executive Alain Grisay said: "Strong investment performance on existing products combined with the new initiatives enables us to turn our attention to strengthening our distribution capabilities."
F&C's UK retail business saw a 23 per cent increase in net sales of open-ended funds compared to an industry-wide decline of 17 per cent.
Grisay said: "We renegotiated our pricing with Friends Provident on a range of flagship fund products which has enabled us to increase our support to the Friends Provident distribution network.
"This has already resulted in improved sales volumes at higher revenue margins."
The fund manager, which is majority owned by insurer Friends Provident, is set to merge with Glasgow-based Resolution Asset Management, creating a company with about 160bn of assets.
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Hide AdHowever, the tie-up between Friends Provident and Resolution is currently under threat from Pearl Group.
But it is unclear how attractive F&C is to those circling Friends Provident, given its patchy track record over the past two-and-a-half years and having only launched a three-year recovery plan at the beginning of the year.
One analyst said: "The problem is that until people see them increase their funds there's a question mark over the direction of the business."
In March, the group reported an 18 per cent slump in full-year earnings and announced plans to cut its dividend in order to help fund the three-year recovery programme.