UPDATE 1-F&C profits rise as falling costs offset lower income
* Net revenues 243.5 mln stg vs 267 mln stg in 2011
* Underlying operating costs 172.1 mln stg vs 202.1 mln in 2011
* Underlying operating profit 71.2 mln vs 65.2 mln
LONDON, March 14 (Reuters) - British investment manager F&C Asset Management reported an increase in underlying profits as a squeeze on operating costs helped offset revenues curbed by fund outflows.
The fund manager said in a statement of full year earnings for 2012 on Thursday that a restructuring of the company prompted by executive chairman and activist investor Edward Bramson is now "substantially completed."
"F&C is now in a position to invest for growth in new markets and capabilities," Chief Executive Richard Wilson said.
The firm said 80 percent of its funds outperformed benchmarks last year, and 76 percent outpaced objectives over three years.
But net revenues slipped to 243.5 million pounds from 267 million pounds a year earlier, reflecting net outflows of 13.3 billion pounds over the year and a 1.7 billion pounds hit from adverse foreign exchange movements.
F&C underwent significant restructuring during 2012, including a new management team with Wilson appointed CEO from his previous post leading the institutional and investment business.
Cost cutting helped take 23.3 million pounds off core operating expenses which stood at 160.5 million pounds, the company said.
Analysts at Numis said operating profit was in line with its forecasts but the company will need to deliver "meaninful organic growth," to impress investors in future.
"This still feels a long way off, as we are unconvinced that the new retail strategy of direct selling... is going to work," the broker said in a note to clients.
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