Ashmore posts better-than-expected 1H profit, positive on outlook for emerging markets

(Sharecast News) - Ashmore posted slightly better than expected profits for the half despite a dip in net management fee margins and sounded a positive note on the outlook.
The emerging markets focused fund manager's boss, Mark Coombs, predicted that some of the headwinds that Ashmore faced in 2021 were expected to abate or reverse over the course of 2022, meaning that the outlook for the performance of Emerging Markets assets was favourable.

"Therefore in addition to the potential for longer term outperformance, the recent correction has presented attractive investment opportunities and, consistent with previous cycles and its value-based approach, Ashmore's investment processes have focused on oversold assets to add risk and to position portfolios to capture the recovery returns available," he added.

For the six months ending on 31 December, the firm reported a 14% decline in its adjusted earnings before interest, taxes, depreciation and amortisation to reach £92.0m (consensus: £89.0m).

That was on the back of a 12% drop in adjusted net revenues to £138.2m.

Net of distribution costs, management fee income fell 6% to £131m, amid a three basis point decline in its net fee margin to 39 basis points, a stronger Sterling exchange rate against the US dollar and 4% growth in its average assets under management versus a year ago.

Assets under management shrank by 8% to $87.3bn with a negative investment performance of $3.9bn and new outflows of $3.2bn.

Average AuM over the period on the other hand was up by 4% to $91.2bn.

Client demand at period start was "relatively subdued" to the ongoing Covid-19 related working practices and "some risk aversion" due to the macroeconomic uncertainties, but activity levels increased over the six months and were broad-based across themes, the company said in a statement.

As of 1031 GMT, shares of Ashmore were dipping 0.14% to 278.60p.