* Interim dividends up 5 percent year on year
* Underlying profit 86.4 mln stg
* Further acquisitions 'unlikely' until 2013 - CEO
* Watching marketing, corporate entertainment costs
(Adds further details, CEO and analyst comments, share price)
By Cecilia Valente
LONDON, Aug 17 Anglo-Australian fund manager
Henderson is bracing for further volatility in global
stock markets and the challenge of keeping cash flowing in as
retail investors fight shy of investments for a few months.
Chief Executive Andrew Formica said the dramatic stock falls
seen in recent weeks had spooked investors, and its effects
would not be forgotten in a hurry.
"Even if markets return to the highs of the year, we think
the psychological effects of market movements seen in the last
few weeks will likely deter retail investors in particular from
investing at a similar pace (to that) we have seen over the past
few years," Formica told a conference call.
Henderson reported 86.4 million pounds ($141.8 million)
underlying profits before tax for the first six months of the
year on Wednesday, in line with its own estimates published last
month, and said it would pay interim dividends of 1.95 pence per
share, compared with 1.85 pence paid last year.
Previously reported assets under management were confirmed
at 74.4 billion pounds.
Analysts at Numis expected interim dividends to amount to 2
pence, while their counterparts at Peel Hunt have forecast
dividends to remain unchanged.
Retail investors accounted for the only inflows the group
recorded in the first half of the year. It attracted 285 million
pounds net inflows from clients such as retirement savers and
private individuals, while institutional investors and insurer
Phoenix withdrew around 3.1 billion pounds.
Formica said it would be "prudent" in these brittle markets
to keep an eye on costs but added Henderson was not looking at
staff redundancies. Instead, the company was making sure its
spending habits were "consistent with a maybe more difficult
"Travelling and entertainment, marketing, any operating
costs such as what you are spending in your IT area, new
recruitment in areas where if you do not see growth you would
expect, you could hold back on," he told reporters.
The company's shares were trading down 1 percent at 140.6
pence at 0923 GMT, roughly in line with a 0.71 percent dip in
the FTSE 250 index . Analysts at Numis gave the stock a
'reduce' rating, but said Henderson shares had held up much
better than rivals from July to date. Analysts at Peel Hunt
retained their 'hold' rating.
Concerns about the euro zone's and the United States' debt
burdens have rocked the markets in the last two weeks, hitting
global markets and leaving fund managers nursing heavy losses
and scrambling to soothe nervy clients.
Formica said some investors were exploiting the volatile
markets to buy equities at bargain prices, but they remained a
ACQUISITIONS ON ICE
Formica also said Henderson was not looking for further
acquisitions until 2013 and was instead concentrating on
extracting "the full benefits" of the Gartmore takeover.
"I would dampen down any enthusiasm that we would do
anything in the short to medium term ... Medium term would
include 2012," Formica said.
He said Henderson was using its spare cash for the
integration and to pay 142 million pounds debt maturing next
May. He said there was no plan for share buybacks either.
($1 = 0.609 British Pounds)
(Editing by Sinead Cruise and Will Waterman)