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BW20030801000003 20030801T110026Z UTC
( BW)(AMVESCAP-PLC)(AVZ) Interim Results
Business Editors
UK REGULATORY NEWS
LONDON--(BUSINESS WIRE)--Aug 01, 2003--
AMVESCAP PLC REPORTS RESULTS FOR SIX MONTHS ENDED JUNE 30, 2003
AMVESCAP reported that profit before tax, goodwill amortization
and exceptional items for the six months ended June 30, 2003 amounted
to £110.9 million ($183.0 million) compared to £192.5 million ($292.6
million) for the six months of 2002. Diluted earnings per share before
goodwill amortization and exceptional items amounted to 9.6p (2002:
16.2p). Revenues totaled £552.6 million ($911.8 million) in the first
half of 2003 compared to £746.7 million ($1,135.0 million) in 2002.
(NYSE: AVZ).
Results for Six Months Ended
2003 2002 2003(b) 2002(b)
-------- -------- -------- ----------
Revenues £552.6m £746.7m $911.8m $1,135.0m
Profit before tax, goodwill
amortization
and exceptional items £110.9m £192.5m $183.0m $292.6m
Earnings per share before
goodwill
amortization and exceptional
items:
--basic 9.6p 16.5p $0.32(a) $0.50(a)
--diluted 9.6p 16.2p $0.32(a) $0.49(a)
Earnings per share before
goodwill
amortization:
--basic 4.6p 14.7p $0.15(a) $0.45(a)
--diluted 4.6p 14.4p $0.15(a) $0.44(a)
Dividends per share 5.0p 5.0p $0.17(a) $0.15(a)
----------------------------------------------------------------------
(a) Per American Depositary Share, equivalent to 2 ordinary shares.
(b) For the convenience of the reader, pounds sterling for the period
ended June 30, 2003 have been translated to US dollars using $1.65 per
£1.00 (2002: $1.52 per £1.00).
"AMVESCAP's results during the second quarter benefited from both
recovering global equity markets and our continued focus on operating
expense management," said Mr. Charles W. Brady, Executive Chairman.
"Investment performance is improving, and the successful integration
of our U.S. retail mutual fund distribution capabilities enhances our
competitive position. Expense control efforts have resulted in a 20%
reduction in our quarterly operating expense level from the second
quarter of 2002 and we expect to exceed substantially our expense
reduction target."
Profit before tax, goodwill amortization and exceptional items for the
three months ended June 30, 2003 amounted to £62.4 million ($103.0
million) compared to £95.1 million ($144.6 million) in the 2002 second
quarter and £48.5 million ($76.6 million) in the first quarter of the
current year. Diluted earnings per share before goodwill amortization
and exceptional items amounted to 5.4p (2002: 8.0p) for the three
months ended June 30, 2003, a decrease of 33% over the corresponding
period of 2002 and an increase of 29% over the 4.2p reported in the
first quarter of 2003. Revenues for the three months ended June 30,
2003 amounted to £281.8 million ($465.0 million) compared to £368.9
million ($560.7 million) from the prior year's quarter.
The Company recorded an exceptional charge of £62.1 million in the
second quarter of 2003 for further expected costs relating to internal
reorganizations and restructuring programs, primarily relating to the
changes in the US retail organization and distribution structure. This
charge amounts to £39.7 million after tax or 4.9p per share.
Funds under management totaled $347.6 billion (£210.7 billion) at June
30, 2003, compared to $332.6 billion at December 31, 2002.
Approximately 51% of the total funds under management were invested in
equity securities and 49% were invested in fixed income and other
securities at June 30, 2003. Equity securities were invested in the
following disciplines at June 30, 2003: 39% in growth, 40% in core and
21% in value styles (March 31, 2003: 35% in growth, 38% in core and
27% in value styles). Institutional money market funds, included
above, amounted to $55.5 billion at June 30, 2003 compared to $57.0
billion at December 31, 2002.
Average funds under management for the six months ended June 30, 2003
were $329.9 billion, compared to $389.1 billion for the first half of
2002. Average institutional money market fund levels totaled $52.6
billion for the first half of 2003. Average funds under management
during the second quarter were $335.8 billion compared to $324.0
billion for the preceding quarter and $385.9 billion for the second
quarter of 2002.
Earnings before interest, taxes, depreciation, amortization and
exceptional items (EBITDA) reached £172.4 million ($284.5 million) and
£94.6 million ($156.1 million) for the six months and second quarter
ended June 30, 2003. Net debt at June 30, 2003 amounted to £625.7
million compared to £652.4 million at December 31, 2002.
The Board has declared an interim dividend of 5.0p per share (2002:
5.0p). The interim dividend will be paid on October 3, 2003 to
shareholders on the register on August 15, 2003. The ex-dividend date
for the dividend will be August 13, 2003.
As previously announced, Diane Price Baker has been elected a
non-executive member of the AMVESCAP PLC Board of Directors.
Additionally, the Board has named James I. Robertson, John D. Rogers
and Mark H. Williamson as executive vice presidents of AMVESCAP PLC.
"Diane Baker adds another experienced, independent member to our
Board," commented Mr. Brady. "James Robertson, John Rogers and Mark
Williamson have been given additional titles at the group level in
recognition of their responsibility along with our other corporate
officers in the shaping and execution of AMVESCAP's overall business
strategy."
Effective January 1, 2003, the Company realigned several business
units under the AIM and INVESCO brands. A I M Distributors, Inc.
became the distributor for INVESCO's US retail funds effective July 1,
2003. Also, the funds' Boards of Directors/Trustees have approved the
reorganization of 14 INVESCO funds and six AIM funds. The
reorganizations are expected to be completed in November 2003, pending
shareholder approval. These changes create a unified distribution
system that will simplify the US retail business by providing
financial consultants and shareholders with additional investment
choices through a single distribution source.
The AIM group reported revenues of £309.6 million during the first six
months of 2003, a decrease of £131.1 million over the prior year due
to volatility in the capital markets, a shift in assets under
management from equities to fixed income, and net redemptions in the
US business. This business group has reduced operating expenses by
£67.1 million and headcount by 558 people over the prior year levels.
These reductions have resulted in only a slight decline in operating
profit margin, even though operating profits have declined from £185.4
million in 2002 to £121.5 million in the 2003 period.
The AIM group generated approximately $14.1 billion of gross sales in
the first half of 2003 and experienced net redemptions of $2.7 billion
during the period, including $800 million of net redemptions in the
second quarter of the current year. The Canadian retail business
gained $100 million in net sales in the six months ended June 30,
2003. Funds under management amounted to $172.6 billion at June 30,
2003, including $55.5 billion relating to institutional money market
funds.
The INVESCO US group reported revenues of £83.7 million and operating
profits of £19.6 million in the first half of 2003. Operating profits
have declined by £4.3 million over the prior year due to a 20% decline
in revenue levels caused largely by capital market declines, offset by
a 21% drop in expenses resulting from continued emphasis on cost
controls. The operating profit margin for this business was 23.4% for
the 2003 period, compared to 22.8% for the prior year. This group
generated $9.4 billion in gross sales during the first half of 2003
and net new business of $100 million. Funds under management amounted
to $109.6 billion at June 30, 2003.
INVESCO UK's revenues amounted to £82.5 million for the first half of
2003, a decrease of £26.4 million from the prior year due to lower
funds under management. Operating expenses declined £12.5 million over
the prior year due to a 262 headcount reduction coupled with other
expense savings. Operating profits totaled £8.1 million for the first
half of 2003, compared with £21.9 from the prior year. This business
generated $9.3 billion in gross sales and $200 million in net sales
during the period. Funds under management were $34.1 billion at June
30, 2003, an increase of $100 million from the end of 2002.
INVESCO Europe/Asia's revenues amounted to £35.7 million for the first
half of 2003, compared to £43.8 million in the prior year. Operating
profits have declined by £2.8 million for the first half of 2003 due
primarily to lower revenue levels. Funds under management were $22.2
billion at June 30, 2003, an increase of $1.1 billion during the year.
Private Wealth Management and AMVESCAP Retirement's revenues amounted
to £41.0 million during the six months ended June 30, 2003. We
continue to develop the infrastructure of this group to build a sound
platform for growth and market penetration. The Private Wealth
Management group acquired Whitehall Asset Management for £13.5 million
in February 2003, adding $1.1 billion in funds under management.
AMVESCAP Retirement had $24.7 billion in assets under administration
at June 30, 2003, a 9% increase in the six month period, including
$413 million of net new sales. This group services 617,403 plan
participants at June 30, 2003, compared to 624,000 participants at the
end of 2002.
"While a quarter is not sufficient time to establish a certain turn in
the markets, I am encouraged by positive signs in the capital markets
and increasing stability in the general economic and political
environment," added Mr. Brady. "AMVESCAP's more efficient operating
platform improves our ability both to weather any future market
volatility and to profit from continuing market recovery."
AMVESCAP is a leading independent global investment manager, dedicated
to helping people worldwide build their financial security. Operating
under the AIM, INVESCO and Atlantic Trust brands, AMVESCAP strives to
deliver outstanding investment performance and service through a
comprehensive array of retail and institutional products for clients
in over 100 countries. The Company is listed on the London, New York,
Paris and Toronto stock exchanges with the symbol "AVZ."
Members of the investment community and general public are invited to
a live webcast presentation of AMVESCAP's interim financial results
today, Friday, August 1, 2003 at 9:30 a.m. EDT (2:30 p.m. BST), by
logging on to the webcast at www.amvescap.com or by dialing into a
conference call at one of the following numbers: 1-800-399-0115 for US
callers or 706-643-0929 for international callers. A replay of the
presentation will be archived at www.amvescap.com. The presentation
slides that will be reviewed during the conference call are available
on AMVESCAP's Web site at www.amvescap.com.
AMVESCAP PLC Group Profit and Loss Account (in thousands)
Six Months Ended
June 30,
-------------------
2003 2002
--------- ---------
Revenues £552,594 £746,685
Expenses:
Operating (418,723) (533,722)
Exceptional (62,094) (20,067)
Goodwill amortization (74,838) (73,688)
--------- ---------
Operating profit (3,061) 119,208
Investment income 3,499 6,812
Interest expense (26,435) (27,241)
--------- ---------
Profit before taxation (25,997) 98,779
Taxation (11,592) (53,066)
--------- ---------
Profit after taxation (37,589) 45,713
Dividends (40,835) (42,359)
--------- ---------
Retained profit for the period £(78,424) £3,354
========= =========
Earnings per share before
goodwill amortization and
exceptional items:
---basic 9.6p 16.5p
---diluted 9.6p 16.2p
--------- ---------
Earnings per share:
---basic -4.7p 5.6p
---diluted -4.7p 5.5p
--------- ---------
Average shares outstanding:
---basic 803,844 812,210
---diluted 805,953 827,314
--------- ---------
AMVESCAP PLC Group Profit and Loss Account (in thousands)
Three Months Ended
June 30,
-------------------
2003 2002
--------- ---------
Revenues £281,796 £368,936
Expenses:
Operating (207,142) (260,821)
Exceptional (62,094) (20,067)
Goodwill amortization (37,492) (36,851)
--------- ---------
Operating profit (24,932) 51,197
Investment income 2,011 159
Interest expense (14,225) (13,203)
--------- ---------
Profit before taxation (37,146) 38,153
Taxation 3,247 (23,243)
--------- ---------
Profit after taxation (33,899) 14,910
Dividends (40,835) (42,359)
--------- ---------
Retained profit for the period £(74,734) £(27,449)
========= =========
Earnings per share before
goodwill amortization and
exceptional items:
---basic 5.4p 8.1p
---diluted 5.4p 8.0p
--------- ---------
Earnings per share:
---basic -4.2p 1.8p
---diluted -4.2p 1.8p
--------- ---------
Average shares outstanding:
---basic 803,120 812,528
---diluted 805,865 824,323
--------- ---------
AMVESCAP PLC Group Balance Sheet (in thousands)
June 30, Dec 31,
2003 2002
----------- -----------
Fixed assets
Goodwill £2,464,908 £2,542,306
Investments 238,401 248,408
Tangible assets 185,592 197,060
----------- -----------
2,888,901 2,987,774
Currents assets
Debtors 915,053 725,547
Investments 73,258 69,195
Cash 307,052 355,111
----------- -----------
1,295,363 1,149,853
Current liabilities
Current maturities of long-term debt (72,389) (222,089)
Creditors (1,096,394) (917,216)
----------- -----------
(1,168,783) (1,139,305)
Net current assets 126,580 10,548
----------- -----------
Total assets less current liabilities 3,015,481 2,998,322
Long-term debt (688,100) (595,600)
Provisions for liabilities and charges (94,934) (119,234)
----------- -----------
Net assets £2,232,447 £2,283,488
=========== ===========
Capital and reserves
Called up share capital £198,652 £198,614
Share premium account 619,592 619,250
Exchangeable shares 383,105 383,105
Profit and loss account 530,874 609,298
Other reserves 500,224 473,221
----------- -----------
Shareholders' funds, equity interests £2,232,447 £2,283,488
=========== ===========
AMVESCAP PLC Group Cash Flow Statement (in thousands)
Six Months Ended
June 30,
-------------------
2003 2002
--------- ---------
Operating profit £(3,061) £119,208
Amortization and depreciation 109,884 105,238
Change in debtors, creditors and other 38,731 4,014
--------- ---------
Net cash inflow from operating activities 145,554 228,460
--------- ---------
Interest paid, net of investment income (21,277) (14,523)
Taxation (60,949) (63,244)
Capital expenditures, net of sales (15,986) (13,709)
Net disposal/(purchase) of fixed asset investments 5,654 (61,305)
Acquisitions and disposals (10,635) --
Dividends paid (52,978) (54,646)
Net repayment of debt (31,756) (7,110)
Change in bank overdraft (5,196) (9,645)
Foreign exchange in cash and cash equivalents (490) (9,021)
--------- ---------
Decrease in cash and cash equivalents £(48,059) £(4,743)
========= =========
AMVESCAP PLC Segmental Information (in thousands)
Six Months Ended June 30, 2003
Oper.
Revenues Expenses Profit(a)
--------- ---------- ---------
AIM
US £239,708 £(150,944) £88,764
Canada 69,909 (37,221) 32,688
--------- ---------- ---------
309,617 (188,165) 121,452
--------- ---------- ---------
INVESCO
US 83,703 (64,149) 19,554
UK 82,515 (74,368) 8,147
Europe/Asia 35,734 (37,551) (1,817)
--------- ---------- ---------
201,952 (176,068) 25,884
--------- ---------- ---------
Private
Wealth/Retirement 41,025 (41,867) (842)
Corporate - (12,623) (12,623)
--------- ---------- ---------
£552,594 £(418,723) £133,871
========= ========== =========
Six Months Ended June 30, 2002
Oper.
Revenues Expenses Profit(a)
--------- ---------- ---------
AIM
US £358,466 £(215,203) £143,263
Canada 82,217 (40,058) 42,159
--------- ---------- ---------
440,683 (255,261) 185,422
--------- ---------- ---------
INVESCO
US 104,721 (80,838) 23,883
UK 108,850 (86,947) 21,903
Europe/Asia 43,753 (42,806) 947
--------- ---------- ---------
257,324 (210,591) 46,733
--------- ---------- ---------
Private
Wealth/Retirement 48,678 (51,714) (3,036)
Corporate - (16,156) (16,156)
--------- ---------- ---------
£746,685 £(533,722) £212,963
========= ========== =========
(a)before goodwill amortization and exceptional items
Note: The segmental information has been revised from previous
presentations to reflect the US INVESCO retail business with AIM.
Previous presentations included this business with the INVESCO US
business.
Notes
1. The taxation charge is estimated based on the total expected
tax charge for the year. A significant proportion of the charge is
expected to arise from US operations.
2. Basic earnings per share is based on the weighted average number of
ordinary and exchangeable shares outstanding during the respective
periods. Diluted earnings per share takes into account the effect of
dilutive potential ordinary and exchangeable shares outstanding during
the period.
2003
-------------------------
Profit Number
after of Per
taxation shares share
£'000 '000 amount
--------- -------- ------
Basic earnings per share (37,589) 803,844 -4.7p
Dilutive effect of options -- 2,109
--------- -------- ------
Diluted earnings per share (37,589) 805,953 -4.7p
========= ======== ======
2002
-------------------------
Profit Number
after of Per
taxation shares share
£'000 '000 amount
--------- -------- ------
Basic earnings per share 45,713 812,210 5.6p
Dilutive effect of options -- 15,104
--------- -------- ------
Diluted earnings per share 45,713 827,314 5.5p
========= ======== ======
Profit before goodwill amortization and exceptional items is a more
appropriate basis for the calculation of earnings per share since this
represents a more consistent measure of the year-by-year performance
of the business; therefore, the calculation below is presented on that
basis.
2003
-----------------------------
Profit before
goodwill
amortization
and
exceptional Number
items of Per
shares share
£'000 '000 amount
------------- -------- ------
Basic earnings per share 76,989 803,844 9.6p
======
Dilutive effect of options -- 2,109
------------- -------- ------
Diluted earnings per share 76,989 805,953 9.6p
============= ======== ======
2002
-----------------------------
Profit before
goodwill
amortization
and Number
exceptionals of Per
shares share
£'000 '000 amount
------------- -------- ------
Basic earnings per share 133,619 812,210 16.5p
======
Dilutive effect of options -- 15,104
------------- --------
Diluted earnings per share 133,619 827,314 16.2p
============= ======== ======
3. The consolidated profit and loss includes exceptional charges in
2003 and 2002 as follows:
£'000 2003 2002
----------------------------------------------------------------------
Redundancy 31,054 14,381
US Retail reorganization 12,183 --
Lease costs 9,620 1,803
Acquisitions 2,326 --
Project costs & other 6,911 3,883
--------------
Total exceptional items 62,094 20,067
--------------
Total exceptional items net of tax 39,740 14,218
==============
4. Whitehall Asset Management was acquired for £13.5 million in
February, 2003. The transaction was accounted for as an acquisition
and results have been included from the date of purchase.
Independent Review Report to AMVESCAP PLC
Introduction
We have been instructed by AMVESCAP PLC to review the
financial information for the three and six month periods both ending
June 30, 2003 which comprises the Group Profit and Loss Accounts,
Group Balance Sheet, Group Cash Flow Statement, Segmental Information
and the related notes 1 to 4. We have read the other information
contained in the interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information.
This report is made solely to the company in accordance with guidance
contained in Bulletin 1999/4 'Review of interim financial information'
issued by the Auditing Practices Board. To the fullest extent
permitted by the law, we do not accept or assume responsibility to
anyone other than the company, for our work, for this report, or for
the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the interim
report in accordance with the Listing Rules of the Financial Services
Authority which require that the accounting policies and presentation
applied to the interim figures should be consistent with those applied
in preparing the preceding annual financial statements except where
any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 'Review of interim financial information' issued by
the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and
applying analytical procedures to the financial information and
underlying financial data, and based thereon, assessing whether the
accounting policies and presentation have been consistently applied,
unless otherwise disclosed. A review excludes audit procedures such as
tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the three and six month periods both ending June 30,
2003.
Ernst & Young LLP London August 1, 2003
AMVESCAP PLC Funds Under Management (in billions)
AIM INVESCO
-------------- --------------------------
Total US Canada US UK Europe/Asia PWM
------- ------- ------ ------- ------ ---------- -----
Dec 31, 2002 $332.6 $144.1 $22.0 $103.5 $34.0 $21.1 $7.9
Market gains/
(loss) 16.7 8.5 0.2 4.3 2.4 0.8 0.5
Net new /(lost)
business (4.5) (2.8) 0.1 0.1 0.2 (1.6) (0.5)
Change in money
market funds (4.5) (4.0) -- -- (0.5) -- --
Transfers -- 1.4 -- 1.7 (3.1) -- --
Acquisitions 1.1 -- -- -- -- -- 1.1
Foreign
currency 6.2 -- 3.1 -- 1.1 1.9 0.1
--------- ------- ------ ------- ------ --------- -----
June 30, 2003 $347.6 $147.2 $25.4 $109.6 $34.1 $22.2 $9.1
========= ======= ====== ======= ====== ========= =====
June 30, 2003(a) £210.7 £89.2 £15.4 £66.4 £20.7 £13.5 £5.5
========= ======= ====== ======= ====== ========= =====
(a) Translated at $1.65 per £1.00.
Note 1: AMVESCAP Retirement has $24.7 billion in assets under
administration as of June 30, 2003, compared to $22.7 billion as of
December 31, 2002.
Note 2: The INVESCO Funds Group funds under management are reflected
with AIM US in this analysis. Previous presentations included these
amounts with the INVESCO US business.
AMVESCAP PLC Reconciliation to US Accounting Principles (in thousands)
Six Months Ended June 30,
-----------------------
2003 2002
----------- --------
Net profit under UK GAAP £(37,589) £45,713
US GAAP Adjustments:
Acquisition accounting 69,445 68,055
Redundancy and reorganizations 39,112 12,794
Taxation (12,375) (8,845)
Other (717) 1,642
----------- -----------
Net income under US GAAP £57,876 £119,359
=========== ===========
Earnings per share:
--basic 7.2p 14.7p
--diluted 7.2p 14.4p
----------- -----------
June 30, Dec 31,
2003 2002
----------- -----------
Shareholders' funds under UK GAAP £2,232,447 £2,283,488
US GAAP Adjustments:
Acquisition accounting 1,069,264 1,034,168
Redundancy and reorganizations 51,073 11,961
Treasury stock (167,621) (162,104)
Dividends 40,512 52,656
Other (13,584) (11,934)
----------- -----------
Shareholders' equity under US GAAP £3,212,091 £3,208,235
=========== ===========
Short Name: Amvescap PLC
Category Code: IR
Sequence Number: 00007880
Time of Receipt (offset from UTC): 20030801T070015+0100
--30--ac/uk*
CONTACT: Amvescap PLC
KEYWORD: UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BANKING HUMAN RESOURCES
SOURCE: Amvescap PLC
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