F&C adds £3m more cuts as optimism rises

Michael Bow
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F&C ASSET Management said yesterday it would increase its radical cost cutting regime by a further £3m as interim results hinted management was starting to turn the business around.

The asset manager, which has seen its share price rise around 20 per cent since June, said it would increase its cost cutting target to £48.8m, up from its target of £45.8m announced in May.

The firm, part-owned by Edward Bramson’s turnaround specialist Sherborne Investors, said yesterday it had achieved cuts totalling £10m in the first half of the year – ahead of its £7.4m target.

Headline figures were disappointing with pre-tax profits down in the quarter from £22.6m to £21m and assets under management dipping two per cent to £98.2bn from £100.1bn

But £1.6bn of new institutional mandates won and good fund performance figures showed analysts the cuts could be starting to pay off.

“We do not see F&C as an earnings driven story near term. This looks to be a cost savings and long term recovery story,” Citi analyst Haley Tam said.

The firm had initially announced plans in October to slash £33.2m of costs.