21st Dec 2005 07:00
F&C Asset Management PLC21 December 2005 F&C Asset Management plc21 December 2005 Trading Update There follows an update with regard to fund flows, progress in delivering the£33 million of annualised synergies from the merger of F&C and ISIS and the costof achieving the synergies. In respect of the Company's year ending 31 December 2005, the Company believesthat earnings will be broadly in line with market consensus. Fund Flows Gross fund outflows, excluding insurance, for the final quarter of the year areestimated at £2.2 billion. Total gross outflows, excluding insurance, for 2005are therefore estimated at £7.8 billion. The pattern of outflows, excluding thepreviously announced anticipated withdrawal of approximately £20 billion byResolution, is expected to continue into the start of 2006. Resolution have nowadvised the Company that some £12 billion of their funds will be withdrawn andtransferred to Britannic Investment Management in early January 2006. The impact of the net fund flows during 2005 will have the consequence ofreducing the average basis points we earn on funds under management from 21basis points at 31 December 2004 to approximately 20 basis points at 31 December2005. The annualised earnings impact of the loss of all Resolution funds, excludingany compensation payments due, is in the region of 3.0 pence per ordinary share. In accordance with the recently introduced International Financial ReportingStandards, the Group is required to undertake as part of the year end process, adetailed impairment review into all areas of its business. The results of thisreview will be disclosed in the Annual Report to Shareholders in March 2006. Synergies and Cost of Achieving the Synergies Based on the Group's 2006 budget, when compared to the pro forma 2004 costs, theGroup will deliver slightly in excess of the £33 million of synergies for theyear to 31 December 2006. This will not only exceed our target but will bedelivered ahead of schedule. Any further cost benefits will be treated asbusiness as usual. Following the decision to withdraw from the outsourcingnegotiations with Mellon announced earlier in the year, the Group will also meetthe £50 million forecast cost of achieving the synergies announced at the timeof the merger. Commenting on the funds flows and achievement of the synergies Mr Grisay, theChief Executive designate, said: "While investment performance has stabilised or improved in a number of areasduring 2005, there are some product areas where we are devoting furtherattention. The poor three year records in these areas have continued to lead toclient outflows during the final quarter of the year. However, in what was the largest transaction in the global asset managementindustry in 2004, I am pleased to report that the synergy targets set at thetime of the merger will be met and delivered ahead of schedule." Press enquiries Jason Hollands +44 (0) 20 750 1168Director, Head of Communications F&C Asset Management +44(0) 7768 661 3282 Ends This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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