Record profits at Invesco

Invesco, the fund management company in the throes of merger talks, yesterday reported record pre-tax profits of pounds 48.5m for the first nine months of 1996, up from pounds 37.5m in the same period last year.

All operating regions outperformed 1995 in terms of income growth, operating margin and pre-tax profits. Total income increased by 21 per cent in the third quarter to pounds 59m, and by 24 per cent in the first nine months of the year to pounds 173.5m.

Operating margins have risen to 27.5 per cent for both the third quarter and nine-month period of this year.

Invesco said the profits improvement reflected the bull conditions of world markets. The stock market in the US, where it has 60 per cent of its funds invested, continues to hit new highs.

However, analysts are cautious on the prospects for Invesco in the last part of the year, given its exposure to stock markets, which are widely predicted to be ripe for a sharp correction.

Invesco's global funds under management grew to pounds 58.5bn at 30 September from pounds 53.8bn at the end of 1995, due mainly to the improvement in world financial markets and partly to net business gains.

Average funds under management were pounds 58bn in the third quarter, up from pounds 57bn in the first six months and from pounds 47bn at the end of 1995.

Earnings per share rose 37 per cent to 13.7p in the nine months, while third quarter earnings per share increased 39 per cent to 4.6p. Invesco's shares held steady at 231p.

The company said its merger talks with AIM Management Group of the US were continuing and a further announcement would be made in due course.