BT reports 44 per cent profit drop

BT Investment Management (BTIM) has reported a 44 per cent decline in net profit after tax to just $12.7 million for the six months ending March 31, but has described it as a satisfactory result in tough conditions.

The company said the result was slightly better than the range of a 45 per cent to 55 per cent decline announced in a market update in February.

BTIM chairman Brian Scullin said the results had been directly affected by the sharp market declines experienced in the six-month period as the company’s funds under management, revenues and profitability are linked to the markets.

The company said funds under management stood at $30.6 billion as at March 31 and that this represented a decline of $4.7 billion for the six-month period.

However, it said against this backdrop, a strong relative market performance by BTIM funds and a growing balance of cash related products mitigated market falls, resulting in a 14 per cent reduction in funds under management compared to a 24 per cent decline in the All Ordinaries Index.

Looking over the horizon, BTIM chief executive Dirk Morris said the company was cautious on the short-term outlook and suggested its second-half revenue would inevitably reflect the lower opening funds under management balance.

He added that further substantial cost savings were becoming harder to deliver.

However, Morris said in the longer-term, underlying superannuation fundamentals remained positive in Australia and the unprecedented scale of government policy stimulus would eventually gain traction.