24th Feb 2015 07:54
LONDON (Alliance News) - Ashmore Group PLC Tuesday reported a 37% rise in first-half pretax profit to GBP110.7 million despite reporting a 15% fall in the assets it manages over the course of the six months.
In a report on the six months to the end of December 2014, the emerging markets asset manager said that pretax profit rose due to "rigorous control" of operating costs, higher performance fees, and a stronger dollar, all of which combined to offset a decline in management fee income.
Assets under management fell to USD63.7 billion from USD75.0 billion over six months, contributing to a fall in first-half net management fees to GBP133.0 million from GBP149.8 million in the corresponding period last year. However, performance fees rose to GBP7.0 million from GBP0.7 million in the corresponding period last year, while the strong dollar generated foreign exchange gains of GBP21.4 million, compared to a GBP18.5 million loss in the first half of the prior financial year.
"In 2015, we expect emerging markets to continue to pursue beneficial reforms, make cyclical adjustments, and sustain flexibility in policy making, made possible due to their attractive growth profiles and distinct advantages over developed markets in that indebtedness and inflation are both at favourable levels," Mark Coombs, chief executive, said in a statement.
"While US monetary tightening is perceived to be a headwind, markets have had nearly two years to adjust to the prospect and Emerging Markets asset prices reflect higher US rate expectations than are likely to be achieved this year. Furthermore, continued loose monetary policy in Japan and the ECB's decision to undertake quantitative easing over the next 18 months are expected to support assets with attractive yields," Coombs said.
"After a period of volatile asset prices but resilience in economic and political fundamentals, Emerging Markets offer attractive near-term returns. Ashmore has experienced and acted upon such value opportunities for clients in the past, and is well-equipped to do so again in this cycle," Coombs added.
Ashmore increased its interim dividend to 4.55 pence per share from 4.45 pence.
By Samuel Agini; [email protected]; @samuelagini
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