Fleming sees profits halve after autumn market crash

ROBERT FLEMING, one of Britain's last independent investment banks, yesterday highlighted the extent of the damage wrought by last autumn's markets collapse as it revealed that profits had almost halved in its latest financial year.

Its pre-tax profits slumped to pounds 70m in the year ending 31 March, from pounds 136m in 1998.

William Garrett, chief executive, said the figures reflected the group's strong bias towards Asian markets and masked a significant improvement in the second half which has continued into the current year.

Some pounds 50m was made in the second half alone as Fleming benefited from the recovery in Asia. But the performance of both the corporate finance and the securities business lost pounds 5m overall, with pounds 75m profit coming from the more resilient asset management business.

"We had a workmanlike recovery in the second half and a spectacular recovery in March and April, particularly in the Asian markets," Mr Garrett said. He pointed out that the group had led some major deals including the flotations of South African Breweries with a pounds 3.2bn price tag. During the year Fleming advised on transactions worth over pounds 22bn, including 42 cross-border deals, and raised more than pounds 11bn for companies in 23 countries through equity and equity-related issues.

Mr Garrett defended the decision to hold its dividend at 25.5p a share, even though this would result in the dividend being uncovered and the firm having to dip into reserves to meet it. He said the decision reflected the firm's confidence. Fleming had budgeted for a covered dividend in the coming year and was ahead of budget in the first two months.