Man Group announces strong profit growth

The Group has seen growth in all its earning streams. Funds under management as at 30 September 2002 stood at $22.1 billion. There has also been significant development in Man's both core businesses. In the first half of the year Man Group acquired RMF Investment Group (RMF). Further business development in the second half has taken place through the acquisition of GNI Holdings Limited (GNI) in Brokerage. The acquisition of RMF has had the effect of almost doubling the Group's capital base in the current period.

Stanley Fink, Chief Executive said:
"The Man Group has enjoyed a successful first half of the year both in terms of strong profits growth and business development. We have seen growth in all our earnings streams particularly in recurring net management fee income, which is up 63%. Strong demand for our products has seen funds under management reach $22.1 billion at the end of the first half and rise further to $23.1 billion as at the end of October. With the integration of RMF which was acquired in May of this year and the completion yesterday of the GNI acquisition, we have added further strength and depth to both our businesses. Given all these developments, the Board is very confident of the outlook for the year."

Profit before tax, goodwill amortisation and exceptional items increased 36% to £138.0 million, after the impact of a negative currency translation of approximately £5.3 million, due to the US dollar weakening against sterling. Diluted earnings per share before goodwill amortisation and exceptional items increased 23% to 37.2 pence.

The level of funds under management were also doubled within three years from its level of $6.7 billion at 31 March 2001. At 30 September 2002, excluding RMF, funds under management had increased to $12.7 billion, well ahead of the required growth run-rate to meet its target. RMF's funds under management were $9.4 billion at 30 September, having increased from $8.7 billion in the four months since acquisition.

Acquiring RMF, a major European provider of alternative investment strategies, at the end of May, provided the Group an opportunity to broaden the range of investment management content, enhance strength in tailored solutions and access to other asset classes including private equity and high yield. The transaction significantly diversified the Group's customer base through RMF's leading position as a provider of alternatives solutions to European institutions.

The full integration of the two firms will position Man as a market-leading provider of a wide range of alternative strategies to all classes of investor. We aim to complete this exercise in the second half of the financial year and have already secured important benefits from bringing the two businesses together. Since acquisition, RMF's hedge fund products have continued to see positive performance and the business has achieved further new sales. RMF's funds under management are up 8% in the four months to 30 September 2002 and its management fee income continues to grow.

Man Group has continued to enhance its sales and marketing presence in North America, a market which is expected to become a significant source of demand for the Group's structured and other products over the coming years, with some sales being achieved in the second half of this year.

Asset Management
The strong level of sales achieved in the six months to 30 September 2002 has continued into the second half of the financial year with both retail and institutional investors displaying an increasing awareness of the benefits of alternative investments as part of a balanced portfolio. The Asset Management division, enhanced by the acquisition of RMF, is well positioned to benefit from continued demand and further growth in assets under management will support increased management fee income.

The latest global product launch, Man IP 220 Series 4 Ltd, closed in October raising a record $686 million of client money and the latest Australian launch, OM-IP 220 Series 8, also closed in October raising $116 million of client money. Funds under management at 31 October had risen to $23.1 billion (£14.8 billion), which includes $10.0 billion (£6.4 billion) from RMF.

Asset Management increased pre-tax profits, before goodwill amortisation, for the first half by 41% to £116.0 million. Recurring net management fee income increased 63% to £80.1 million as a result of the growth in funds under management.