Ashmore AuM rise but profits drop on FX

In the six months ending 31 December 2017, assets under management were up 18% to $69.5bn, with a large proportion of this resulting from net inflows of $7.9bn. Ashmore said it saw broad client demand across fixed income, equity and overlay products.

However, statutory pre-tax profit fell to £99m from £121.5m in the same period a year ago as it was hit by foreign exchange translation and lower contributions from performance fees and seed capital investments.

Still, pre-tax profit was ahead of Numis's estimate of £75m and the £84m consensus forecast.

Basic earnings per share fell by 18% to 12p while diluted earnings per share were down 19% to 11.3p and net revenue came in at £134.4m from £144.1m. Numis had pencilled in revenue of £125.2m, while consensus had it at £128.4m.

Chief executive Mark Coombs said: "The favourable environment for emerging markets is reflected in Ashmore's solid operating performance during the period, with 18% growth in assets under management, strong investment performance for clients, and increased profitability. We expect another good year of performance across the range of emerging markets asset classes in 2018, as economic conditions continue to be supportive, valuations remain attractive, and therefore investors continue to increase allocations."

Numis, which rates the stock at 'reduce', said: "Clearly current flow momentum remains strong and we still consider Ashmore a core long term sector holding, however, we also think circa 20x FY19 P/E is too expensive on a shorter term basis to have a positive recommendation today."

At 0910 GMT, the shares were up 0.3% to 421.40p.