F&C Asset Management reported a rise in profits but warned that the group faced “financial headwinds” following net outflows of £19 billion ($31.7 billion) during the year.

F&C Asset Management reported a rise in profits but warned that the group faced “financial headwinds” following net outflows of £19 billion ($31.7 billion) during the year.

In its interim statement for the year ended 31 December 2013, the group reported an increase in underlying profit before tax of 33 per cent to ÂŁ69.2 million, up from ÂŁ51.9 million for the same period a year ago.

The group recorded overall net outflows of ÂŁ19 billion during the year, made up of ÂŁ20.3 billion of strategic partner outflows. The combined annualised revenue loss associated with these assets and related fee changes was ÂŁ35.5 million, of which ÂŁ11.3 million is reflected in the 2013 results, the firm said.

Consumer and institutional net inflows were ÂŁ1.3 billion for 2013, up from a net outflow of ÂŁ1.9 billion in 2012.

The group reported “strong” investment performance, with 80 per cent of assets under management  outperforming objectives over the one and three-year periods to 31 December 2013.

Assets under management were ÂŁ82.1 billion for 2013, down 14 per cent from ÂŁ95.2 billion at the end of 2012, while net revenue was ÂŁ241.2 million, down 0.9 per cent from ÂŁ243.5 million in 2012.

The firm said it has continued to make good progress with the cost-reduction programme initiated in 2011 and remains on schedule to achieve the previously announced cumulative savings target of ÂŁ48.8 million.

"I am pleased to report an encouraging set of results for the group, reflecting strong investment performance and substantial improvements to net fund flows in our consumer and institutional business. We have also made good progress in delivering on our objective to reduce our cost base and we remain on track to meet our targets,” said chief executive Richard Wilson.

“While 2013 has been a year of progress, we also acknowledge the financial headwinds that still face our business. The withdrawal of assets from strategic partners will continue to impact upon revenues, while the development of our consumer and institutional business will take time and investment,” he added.