Profits halved at City of London

14th Sep 2009 09:49

Emerging markets asset management group City of London Investment Group saw pre-tax profit halve in the full-year but said emerging markets have recovered strongly since the year end.Pre-tax profit dropped to £5.4m in the year ended 31 May compared with £10.7m last time. Fee income, predominantly US dollar denominated, fell by 19% to £20.2m.From the end of May 2008 to the end of May 2009, the MSCI Emerging Markets Index (MXEF) fell by 36%. City of London's funds under management (FuM) declined by 26% over the same period to end the year at $3.5bn, or £2.2bn.Since the year end, the MXEF has risen by 9% to the end of August while City of London's FuM have increased by 13% to $4bn, or £2.4bn.The final dividend has been cut to 10p per share compared with 13.5p in 2008.'From the lows recorded following the collapse of Lehman Brothers in September 2008, emerging markets recovered strongly to our financial year end,' said chairman Andrew Davison.'The recovery has continued into our new financial year as investors recognised that the prospects for many emerging markets are better, in both the short and longer term, than those for developed economies.''This is not to say that we believe there will be no further volatility but we anticipate that the very pronounced troughs and peaks of the last year will be moderated,' he added.