INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012
Key points
- Funds under management (FUM) at 30 June 2012 of $52.7 billion (31 December 2011: $58.4 billion), reflecting sales of $7.2 billion, redemptions of $9.6 billion, investment movement of -$0.3 billion, FX translation effects of -$0.5 billion and other movements, principally guaranteed product degears, of -$2.5 billion
- Adjusted profit before tax (PBT) of $121 million, comprising adjusted net management fee PBT of $108 million and net performance fee PBT of $13 million
- Statutory loss before tax on continuing operations for the six months ended 30 June 2012 of $164 million, reflecting impairment of goodwill associated with GLG ($91 million) and Man Multi-Manager ($142 million)
- On track to deliver $95 million of operating cost savings announced in March 2012
- Further annual cost savings of $100 million over the next 18 months announced today
- Surplus regulatory capital of $704 million at 30 June 2012, net cash of $564 million and total liquidity resources of $3.0 billion
- Interim dividend of 9.5 cents per share; total dividend for the year expected to be 22 cents.
Peter Clarke, Chief Executive of Man, said:
"Against a turbulent market and economic background, Man's funds under management have declined in the period principally as a result of continued net outflows and the deleveraging of our guaranteed products. The result is a marked decline in underlying profitability which, after goodwill impairments, produced a statutory loss.
"We have made progress in the last six months to address costs across our business and we continue to expand our investment management capabilities both organically and through acquisition. At AHL we have continued to refine our trading models, invested in senior hires and seen signs of improvement in performance versus leading peers. GLG generated over two thirds of our $7.2 billion sales in the period, delivered strong performance in credit strategies, market neutral and European long short styles and launched complex thematic products such as TailProtect. The FRM acquisition closed on 17 July, ahead of schedule, and creates the largest independent non-US based fund of hedge funds in an industry where economies of scale are a critical success factor. Across the board, we are on track to achieve our previously announced cost saving programmes.
"Our focus is on delivering attractive levels of profitability from our liquid, open-ended investment strategies and so reducing reliance on high margin guaranteed product which is seeing subdued demand. To align our infrastructure appropriately to this dynamic in the business, we have today announced further cost savings of $100 million, to be achieved over the next 18 months.
"Man remains financially robust and enjoys a strong position in the market for liquid alternatives. We are confident that the changes we have announced today, together with the progress we have already made, position us well to protect and rebuild shareholder value."
