Henderson Group Plc (HGI) posted a 54% slump in first half profit to 41.1 million pounds ($87.87 million). The dual listed company said that a hostile environment, involving weaker markets and subdued demand for investment products dampened fee income.
The company said that assuming markets do not continue to worsen it would still able to meet or beat last year's full year result of 109.6 million pounds, as cost cutting measures and higher inflows from the institutional division kicked in during the second half.
Chief executive Roger Yates said retail investor confidence would remain fragile, thus the business remained cautious about net flows into wholesale funds during 2008 and into 2009.
"Although there are current opportunities in hedge funds, property and institutional overall, we expect fund flows to be subdued in the second half of 2008," Mr Yates said.
Operating profit for the half was 60.6 million pounds down 1.3%.
The group's cost to income ratio fell to 59.8% from 65.6%, on par with expectations.
Due to turbulent markets, assets under management, fell 11% to 52.6 billion pounds ($111.9 billion) over the half.
Management fee income decreased by 8% to 119.2 million pounds in the period, mostly due to weaker equity markets and the absence in 2008 of make-whole fees earned on structured products in the first half of 2007.
Transaction fee income fell by 13% to 8.7 million pounds, largely due to a slower pace of investment in property.
Net performance fees were 15.5 million pounds in the period, down 56% on the previous corresponding period.
The company said, it was proposing a change in the corporate structure and organisation of the group, including its intention to create a new holding company for Henderson Group which would be incorporated in Jersey.
"As our business becomes increasingly global, we have concluded that the group and its shareholders would be better served by having an international holding company," it said.
The company said such a structure would help protect the group's taxation position and better facilitate its financial management.
Despite the fall in profit, the interim dividend climbed 2% to 1.85p."
Yesterday, shares in Henderson Group were steady at $2.64.