Exeter is in talks with other investment groups to acquire funds as it looks to diversify its busine...
Exeter is in talks with other investment groups to acquire funds as it looks to diversify its business model.
The fund manager disclosed the policy as it announced an 18.4% fall in pre-tax profits for the six months to 31 March 2002. It had already signalled its interest in February, however, with the purchase of the Duncan Lawrie Smaller Companies unit trust, now rebranded Exeter.
Exeter has blamed the declined in the split-cap sector for the fall in profits.
Barring unforeseen circumstances, the board of Exeter announced that the pre-tax profits for the six months are likely to be approximately £2m compared to £2.45m for the corresponding period last year.
As a result, Exeter is warning that the pre-tax profit for the second half of the year is likely to be substantially below the level for the first half.
While no Exeter-managed investment trust has breached its banking covenant, the decline in the split-cap sector has led to a reduction in asset values and the premature repayment of £65m of debt by its investment trusts. This has led to a decline in management fees.
Philip Titchener, marketing manager at Exeter, said given that 50% of the group's assets are in splits, these results are better than some feared.
He said: 'With regard to the profit warning put out for the second half of the year, it is difficult to gage the recovery in splits as we are now beginning to definitely see the tide turn and we believe we are in the bottom of the market.
'We have been diversifying over the past five years and have a portfolio of products we hope to grow.'
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