The group said that banks and financial services companies were facing very different conditions and the time had come to allow a successor to take the group forward. Keogh will remain in charge until a successor is found.
The announcement came as the group revealed a ‘resilient’ set of results. Pre-tax profits fell from £190.2m to £127.5m. The group will pay a final dividend of 25.5p per share (2007: 25p), bringing the full dividend for the year to 39p per share, up 5% on last year
The group said its capital base remains comfortably above regulatory requirements with a Tier 1 capital ratio at 31 July of 14.4%.
Asset management and corporate finance accounted for much of the group’s weakness. Adjusted operating profit for the asset management division fell from £56.6m to £32.6m with weaker margins and a 10% drop in assets under management. The group had tough comparative figures after a strong performance from its private equity division last year, but also blamed weak markets.
Operating profits from the corporate finance division dropped from £22.5m to £10m. During the year, the group bought the remaining management held minority interest in its French business. It has also recently acquired the 55% management interest of Spanish associate, Atlas Capital.
The banking division performed well with the group’s loan book up by 14%. Bad debts saw a small (0.2%) increase. The group said it sees strong potential for growth in the division over the next year.
The group expects difficult markets to continue to weigh on its operations over the next year, particularly in the asset management division. It has taken steps to reduce costs.
The shares dropped 3.44% to 618p. They had been staging a bounce from below 500p earlier this year. The group has received a number of takeover approaches, but these dried up as the credit crunch hit. There have also been rumours about a management buyout. However, the group has often been criticised for its complexity, which has put off investors and buyers alike. The group now trades at around 10x earnings, neither cheap nor expensive and there is little to recommend buying the shares at the current price.
