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Newton sees 28% profit fall before Standard Life Wealth deal
by Sarah Miloudi on May 13, 2013 at 10:32
Newton Investment Management's profit after tax has fallen 28% year-on-year.
In the 12 months prior to striking its £83.5 million deal with Standard Life Wealth, the asset manager's profit after tax dropped from £75.6 million to slightly over £54 million.
While the performance of Newton's funds improved relative to benchmark over the year to the end of December and its assets under management climbed by 13%.
A rise in staff costs will have hit Newton's bottom line, however, as despite some individuals moving over to Standard Life Wealth as part of its imminent takeover of Newton's private client division, the firm added to its head count over the year and said it is 'investing heavily' in system development to ensure its operating platform is functioning efficiently.
Moreover, in 2011 Newton made use of a group tax relief in order to offset its corporation tax liability.
Year-on-year this has resulted in a 'significant change' in its retained profit, Newton added.
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