By Scott Kanowsky
Investing.com -- Fund manager Ashmore Group Plc (LON:ASHM) has reported a sharp slide in annual pre-tax income, as macroeconomic trends and the outbreak of the conflict in Ukraine led investors to shy away from riskier assets.
The UK-based firm, which specializes in emerging markets, posted a profit before tax of £118.4M for the year ending on June 30 - a slump of more than 58% compared to £282.5M in the previous period.
Meanwhile, assets under management declined by 32% to $64B, due mainly to negative investment performance of $16.6B and net outflows of $13.5B.
"The combination of geopolitical tension, high inflation figures and central banks tightening monetary policy, including the [Federal Reserve] in the second half of the year, with the consequent negative impact on market levels, meant that investor risk appetite was markedly lower as the period developed," Ashmore said in a statement.
However, the company still presented a relatively rosy outlook for emerging markets. Ashmore predicted that soaring consumer prices should abate in the coming quarters, which would persuade central banks to pull back on recent monetary policy tightening and subsequently stimulate widespread economic growth.
"This scenario would be consistent with a return to higher levels of investor risk appetite and improved sentiment towards Emerging Markets, providing meaningful catalysts for a recovery in asset prices from current levels," Ashmore said.
Ashmore also recommended a final dividend to shareholders of 12.1 pence per share.
Analysts at Peel Hunt said Ashmore's latest earnings were broadly in line with their estimates and backed its long-term outlook despite lingering immediate uncertainties.
Shares in Ashmore rose by more than 5% in early afternoon trading.