By Jemima Kelly
LONDON (Reuters) - British emerging markets specialist fund manager Ashmore blamed a foreign exchange hit for a one-third drop in first-half profits, sending its shares down 7 percent on Tuesday.
In an interim report, the FTSE 250 company announced profit before tax of 79.5 million pounds ($132.21 million), down from 120.2 million pounds in the same period a year earlier.
Analysts at Numis had expected pre-tax profit of 92 million pounds.
"It's an OK financial and operating performance but the FX issue clouds the reporting picture," Chief Financial Officer Tom Shippey told Reuters on Tuesday.
Shippey said Ashmore's exposure to the U.S. dollar, through cash deposits and seed capital, had a significant impact on profits, as well as low performance fees.
Translation of Ashmore's non-sterling assets and liabilities caused the company a 20.5-million-pound hit, reflecting the strength of sterling versus the dollar.
Assets under management were down $2.1 billion during the period as a result of net outflows of $2.9 billion as investors took fright at heightened volatility in emerging markets, but partially offset by investment returns of $800 million.
"These financial results reflect the weak market backdrop which existed for much of the period," Mark Coombs, Ashmore's billionaire CEO and founder, said in a statement.
Ashmore said it would pay out an interim dividend of 4.45 pence per share, giving CEO Coombs, who owns a 41 percent stake in the company, a more than 13 million pound windfall.
Ashmore's weak results contrasted with fellow British FTSE 250 fund manager St James's Place, which said on Tuesday that profits for 2013 were up 18 percent.
(Reporting By Jemima Kelly; editing by Tom Pfeiffer)