Strategic partners reshaping their insurance books withdrew billions of euros of funds from the care of F and C Asset Management (FCAM) in 2011.
Assets under management at the year's end were £100.1bn, down from £105.8bn at the same point in 2010. Net outflows totalled £7.2bn, so the underlying performance of the portfolio was positive.
Underlying profits before tax were £47m against a consensus forecast of £46.4bn while total revenues came in at £267m, below expectations of £272.7m. Underlying earnings per share of 5.5p were down from 5.7p the year before and a shade below the 5.59p expected by the market.
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An unchanged final dividend of 2p has been proposed, leaving the full year pay-out at 3p, versus forecasts of 3.13p.
FCAM attributed the outflows to "the underlying maturity profile of some of our strategic partners' insurance books". It also cited market conditions in Portugal and Ireland and the partial nationalisation of the BCP Pension Scheme in Portugal as significant problems.
The group closed the year with £196.9m of shareholders' cash reserves and net debt was reduced to £77.8m (2010: £95.9m). A significant proportion of the shareholders' cash reserves are held in FCAM's regulated subsidiaries against their capital requirements.
F&C announced in October its Chief Executive, Alain Grisay, was retiring towards the end of 2012 and would step down from the board at the annual general meeting in May. Grisay's decision followed shortly after activist investor, Edward Bramson, masterminded a board room coup last year and took over as Chairman. Since Grisay announced his decision Bramson has taken on executive responsibilities.
Bramson, said of the results: "Against a tough market backdrop, F&C had reassuring net inflows from third-party institutional clients during the year and investment performance remained competitive. Encouragingly, consultant buy ratings are now at record levels as we gained further recognition for our core institutional expertise."
Cost savings in 2011 exceeded amounts indicated at the time of Bramson's strategic review presentation in October 2011. The full £33.2m cost reduction programme is on track and will substantially be achieved by year end, Bramson pledged.
"This will enhance underlying earnings and the level of dividend cover, provide the group with the ability to accelerate the retirement of its long-term debt and generate cash to re-invest in growth. The second phase of the strategic review, which will focus on the growth strategies for our retail, wholesale, investment trust and real-estate businesses, is progressing well and we expect to conclude this work in May," Bramson revealed.
Shares in F&C had dropped 1.23% by 8:42
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