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Henderson hit by writedowns

Henderson Group has taken a £97.3m hit to profits after writing down a bank stake and taking a loss on one of its structured products.

The company made a profit of £80.3m before tax and non-recurring items but after the writedowns, there is a loss of £17m for 2008.

The non-recurring losses included £68.8m after the writedown of a stake in Banco Popolare Gruppo Bancario and a £7.2m loss in a seed stake in one of its structured products. Other losses came from restructuring, third-party administration review and scheme of arrangement costs.

Profits also took a 25 per cent hit before non-recurring items, falling to £80.3m from £106.7m in 2007. These losses were due to debt raised in May 2007 as well as lower transaction and net performance fees.

Chief executive Andrew Formica says: “We have had this bank stake which is both a historical and distribution arrangement, which we decided needed to be unwound in 2008.

“The share price of that bank has continued to fall markedly since we made the decision in December 2008 so it has proved a wise decision. As for the structured product, the vehicle is still running but we decided to write the equities down to zero as we want to ensure there are no surprises on our balance sheet.”

Henderson Global Investors saw its assets fall by 9 per cent to £99.7m before tax and non-recurring items in 2008. Non-recurring losses saw the firm lose £20.8m in 2008.

Assets under management at the firm also fell by 16.3 per cent in 2008 from £59.2bn to £49.5bn. The group says the falls come from unfavourable market conditions and foreign exchange rate movements of £5.9bn as well as £6.7bn of net outflows from Pearl.



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