Henderson, the fund management group, has issued an unscheduled trading update saying it expected to unveil first-half pre-tax profits of between £83m and £87m next month, up from £48.5m last year following the acquisition of Gartmore in April.
The group, which bought rival Gartmore for about £335m after it was hit by a series of staff departures and large-scale outflows from its funds, said the rise in pre-tax profits was due in part to retaining more of Gartmore’s assets than forecast and stronger performance fees.
Henderson said its total assets under management had risen from £61bn in December risen to £74.4bn at the end of June. This was slightly down on assets of £76bn on March 31. Gartmore’s assets under management were £15.5bn by June against £16.5bn in December and £15.7bn when the deal completed in April.
“Integration of the Gartmore business is well advanced,” said Henderson, which will phase out the Gartmore name – one of the City’s best-known – over the coming months.
The better-than-expected retention rate of Gartmore funds was slightly offset by a £1.5bn of assets transferring from Henderson Liquid Asset Fund to DB Advisors. There was also a £2.6bn net outflow from Henderson institutional funds that was announced in May – worse than some analysts expected.
Gross performance fees will be about £54m against £24.6m in the first half of 2010 but the group warned that performance fees would be “substantially lower” in the second half of the year.
Henderson shares closed up 3.89 per cent to 154.9p.
The group’s brokers, JPMorgan Cazenove, had estimated £70m in pre-tax profits and about £36m in performance fees. Morgan Stanley had pencilled in £65m in underlying pre-tax profits.
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