REG-Ashmore Group Plc Preliminary Final Results

Released : 12/09/2007

                                                                                                                       .
RNS Number:7025D 
Ashmore Group PLC 
12 September 2007 
 
 
Press release 
 
 
Ashmore Group plc 
 
 
12 September 2007 
 
 
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2007 
 
Ashmore Group plc, one of the world's leading emerging market investment 
managers, today announces its audited results for the year ended 30 June 2007. 
 
 
Financial highlights 
 
-  Assets under management of US$31.6 billion at 30 June 2007, up US$11.5 
   billion, 57% in the year 
 
-  Net management fees of £126.4 million, 61% higher than for the year 
   ended 30 June 2006 
 
-  Performance fees of £20.4 million (£54.2 million for the year ended  
   30 June 2006) 
 
-  Profit before tax of £131.4 million, up 26% (a 36% increase at 
   constant exchange rates, see note below) 
 
-  Basic eps of 13.7p (2006: 10.8p) and diluted eps of 12.9p (2006: 10.4p) 
 
-  A final dividend of 6.7p per share will be paid on 7 December 2007, 
   giving a total dividend for the year of 9.0p. 
 
 
Note: The increase in profit before tax at constant exchange rates is calculated 
  by restating the prior year at the current year's average US$/£ exchange rate. 
 
 
 
Commenting on the results Mark Coombs, Chief Executive Officer Ashmore Group 
plc, said: 
 
"During the year we continued to make significant advances towards our strategic 
goal to be the leading emerging markets investment manager. These results 
clearly demonstrate the progress we have made in the year, enhancing our 
long-term track record. The Group is well placed to continue its growth momentum 
into the 2008 financial year". 
 
 
Analyst/investors briefing 
 
There will be a presentation for analysts at 09.30 on 12 September at the 
offices of Goldman Sachs at Peterborough Court, 133 Fleet Street, London EC4A 
2BB. There will be a conference call for US based analysts and investors at 
14.00 London time, 09.00 US Eastern time. Dial in details are available upon 
request from Penrose Financial on the number below. A copy of the presentation 
will be made available on the Group's website at www.ashmoregroup.com. 
 
 
Contacts 
 
 
For further information, please contact: 
 
Ashmore Group plc                                             +44 20 7557 4100 
Jim Pettigrew                                                 +44 20 7557 4157 
Chief Operating and Financial Officer 
 
 
Penrose Financial                                             +44 20 7786 4888 
Gay Collins                                                   +44 7798 626 282 
 
 
 
 
Ashmore Group plc 
 
 
Results overview 
 
The 2007 financial year represented another successful stage in the development 
of the Group. Significant year-on-year increases in assets under management 
(AuM), revenue, profit and eps were reported, exceeding the financial targets 
the Group set itself at the beginning of the financial year. 
 
The key driver of profit growth in the year was the substantial (61%) increase 
in net management fees, which was achieved across the Group's investment themes. 
Net management fees by theme, net of distribution costs, are set out in the 
table below. 
 
 
                                        Year ended    Year ended 
                                           30 June       30 June       Increase against prior year 
                                              2007          2006 
Investment theme                                £m            £m                £m               % 
__________________________________________________________________________________________________ 
 
Global US$                                    71.9          52.2              19.7              38 
Local currency                                21.4          11.3              10.1              89 
Special situations                            25.9          11.9              14.0             118 
Equity                                         7.2           3.1               4.1             132 
__________________________________________________________________________________________________ 
 
Group net management fees                    126.4          78.5              47.9              61 
__________________________________________________________________________________________________ 
 
 
 
As well as the growth in absolute levels of net management fees, the Group's net 
management fee margin increased to 93 basis points in the financial year to 30 
June 2007 from 83 basis points in the prior year. 
 
Performance fees were £20.4 million in the year ended 30 June 2007 compared to 
£54.2 million in the prior year. This was predominately due to a reduction in 
the performance fee delivered by EMLIP (the Group's US$5 billion global US$ 
fund) for which investment performance was ahead of the peer group and relevant 
benchmarks, but in line with its hurdle rate. In the previous year, investment 
performance for EMLIP was in excess of the hurdle rate. 
 
Other revenue was substantially up on the prior year at £13.0 million (2006: 
£2.9 million) reflecting a higher level of transaction based corporate finance 
fees generated in the year. 
 
The Group continues to manage its cost base in an efficient and effective 
manner. Against the backdrop of substantial AuM and revenue growth, the Group 
continues to invest to support the future growth of the business. 
 
There were a number of one-off costs in the year to 30 June 2006: professional 
fees associated with the Company's IPO (£2.0 million) and a share-based payments 
charge in respect of the change from a cash to equity-settled basis (£4.9 
million). Excluding these items and the costs of the Group's administration 
business (£0.4 million), which was disposed of in December 2005, costs increased 
by £4.5 million, a 13% increase in the year. As part of the process of 
supporting the growth of the business, the Group's headcount increased by 41%, 
from 49 at 30 June 2006 to 69 at 30 June 2007. During the year the number of 
investment professionals within the Group increased from 17 to 25, continuing 
the process of building the next generation of Ashmore investment professionals. 
 
The largest component of the cost base is variable compensation (including 
share- based payments) which was 18.4% of profit before tax, interest and 
variable compensation for the year ended 30 June 2007 (2006: 24.3%). In order to 
provide greater flexibility, in future years, the intention is to pay up to 25% 
of the Group's profit before tax, interest and variable compensation as variable 
compensation, previously 20%-25 %. 
 
An operating profit margin of 76% was achieved in the financial year to 30 June 
2007 (70% in 2006), with the current year's margin benefiting from the lower 
variable compensation ratio. The Group continues to plan the development of its 
activities as a relatively high margin investment management business. 
 
These results were achieved against the backdrop of a weaker US$/£ exchange 
rate. As the majority of the Group's revenue is denominated in US dollars, while 
the cost base is largely in sterling, this has impacted on the Group's reported 
profit. Reported profit before tax increased by £27.5 million, a 26% increase 
over the prior year.  After excluding the impact of US$/£ exchange rate 
movements, at constant exchange rates, profit before tax increased by £34.1 
million, an increase of 36% in the year. 
 
Basic eps were 13.7p, an increase of 27 % on the prior year. Diluted eps were 
12.9p (2006: 10.4p). 
 
 
Operations and investment theme review 
 
The investment philosophy and process that has been in place at Ashmore for many 
years remains unchanged. Ashmore follows an active, value-driven and mainly 
top-down investment approach. The Group also selects credits and certain 
investments through bottom-up analysis, particularly for those funds where 
corporate and special situations/distressed assets are more significant. 
 
As at 30 June 2007, the Group managed 41 funds/segregated accounts, diversified 
across four investment themes. 
 
 
AuM increased by US$11.5 billion (57%) from US$20.1 billion at 30 June 2006 to 
US$31.6 billion at 30 June 2007. Net subscriptions in the same period were 
US$8.3 billion (2006: US$7.9 billion), consisting of gross subscriptions of 
US$10.4 billion (2006: US$10.1 billion) and redemptions of US$2.1 billion (2006: 
US$2.2 billion). These gross flows exclude US$0.4 billion of intra-investment 
theme flows by the Group's multi-strategy fund. On a net subscriptions basis 
there were US$4.3 billion of net inflows into existing funds and fund raisings 
into new products and funds of US$4.0 billion in the financial year. Investment 
performance contributed a total of US$3.2 billion. 
 
 
                                      AuM as at                                            AuM as at 
                                        30 June               Net                            30 June 
                                           2006     subscriptions        Performance            2007 
Investment theme                          US$bn             US$bn              US$bn           US$bn 
____________________________________________________________________________________________________ 
 
Global US$                                 15.2               4.1                1.9            21.2 
Local currency                              3.0               1.4                0.6             5.0 
Special situations                          1.3               1.8                0.3             3.4 
Equity                                      0.6               1.0                0.4             2.0 
____________________________________________________________________________________________________ 
 
Total                                      20.1               8.3                3.2            31.6 
____________________________________________________________________________________________________ 
 
 
 
Global US$ 
 
The global US$ investment theme comprises US dollar and other hard currency 
denominated instruments which may include derivatives, investing principally in 
sovereign bonds but with a growing corporate debt element. 
 
AuM at 30 June 2007 were US$21.2 billion, an increase of US$6.0 billion (39%) 
from 30 June 2006. Net subscriptions in the year were US$4.1 billion, 
representing 49% of the Group's net inflows in the year. Performance contributed 
US$1.9 billion. 
 
During the year, there were strong inflows into the theme's public open-ended 
funds, with two new fund launches: a new structured product initially funded at 
US$0.2 billion in the first half of the financial year and a new US$0.4 billion 
segregated account in the second half. In November 2006, one small segregated 
fund was merged into a public fund. 
 
While the global US$ investment theme continued to generally outperform the 
relevant benchmarks it has not been a particularly strong investment return 
year. 
 
 
 
Local currency 
 
The local currency investment theme comprises local currency and local currency 
denominated debt instruments, principally sovereign in nature, and it may 
include derivatives. 
 
AuM at 30 June 2007 were US$5.0 billion; an increase of US$2.0 billion (67%) 
from 30 June 2006.There has been strong demand for the Group's local currency 
products with net subscriptions in the period of US$1.4 billion. As part of the 
process of accessing the increasing European appetite for the local currency 
theme, a new targeted SICAV fund was launched in the first half of the financial 
year and this was initially funded at US$0.1 billion. Theme performance in the 
period contributed US$0.6 billion. 
 
Generally, it has been a good investment performance year for the theme, 
assisted during most of the year by the relative strength of local currencies 
against the US dollar. The local currency markets continue to deepen, with 
gradually improving liquidity and the extension of duration. 
 
 
Special situations (distressed debt/private equity) 
 
The special situations (distressed debt/private equity) theme comprises 
investments in debt and/or equity or other instruments focussing on situations 
usually involving specialist corporate investments and/or projects and including 
distressed assets or distressed sellers of assets, often incorporating 
restructuring, reorganisations and /or a private equity approach. 
 
AuM at 30 June 2007 were US$3.4 billion, an increase of US$2.1 billion (162%). 
Net subscriptions were US$1.8 billion, with performance contributing US$0.3 
billion. 
 
Included within net subscriptions is the Group's GSSF 3 fund which was launched 
in August 2006. This represented US$1.4 billion of the total net subscriptions 
in the period and as at 6 September 2007 it is 100% drawn down. A new private 
equity fund investing in Turkey was launched in the second half of the financial 
year initially funded at US$0.1 billion. 
 
It has been another positive year from the perspectives of investment 
performance, deal opportunities and realisations. The Group's network continues 
to source an attractive pipeline of deals. 
 
 
Equity 
 
The equity investment theme comprises public equity and equity-related 
securities. The instruments invested in by the funds can include equities, 
convertibles, warrants and equity derivatives. 
 
AuM at 30 June 2007 were US$2.0 billion, an increase of US$1.4 billion (233%) 
from 30 June 2006. Net subscriptions were US$1.0 billion, with performance 
contributing US$0.4 billion. 
 
Net subscriptions benefited by US$0.8 billion as a result of two new segregated 
funds that were launched in the first half of the financial year. There were two 
small lower margin segregated funds that were closed in the second half of the 
financial year (US$0.2 billion in total). 
 
It was a good year from an investment return point of view.  The theme continues 
to be characterised by the relative movement of global liquidity from US 
equities to emerging market equities. 
 
 
Multi-strategy funds 
 
Net subscriptions into the Group's multi-strategy funds, where Ashmore is making 
the asset allocation decision across the Group's investment themes, were US$1.8 
billion and represented 22% of the Group's total net subscriptions in the year 
of US$8.3 billion. This includes a new fund launched in April 2007 for the 
Japanese retail market which raised US$1.0 billion. 
 
 
Diversification of product offering 
 
There were eight new fund launches during the year and, after taking account of 
two small segregated account closures and one fund merger, by 30 June 2007 the 
Group was managing 41 funds /segregated accounts. These funds are spread across 
the Group's four investment themes, highlighting the diversification of the 
Group's AuM. The global dollar debt theme represented 67% of the Group's AuM in 
June 2007, compared to 76% in June 2006. Furthermore, the Group's AuM is 
diversified by type of account: 52% of AuM is in Ashmore sponsored funds, 32% in 
segregated accounts, 10% white label and 6% in structured products. 
 
As at 30 June 2007, 64% of funds by AuM can generate performance fees (2006: 
57%). These funds, totalling 22 in number (2006: 17), are spread across the 
Group's investment themes. Only 46% of AuM can make use of leverage and, where a 
fund can use leverage, it is usually restricted to a maximum of 50% of a fund's 
AuM, and never more than 75%.  Typically a fund's leverage capacity is not fully 
utilised. 
 
 
Investor profile 
 
There is a broad range of investors in the funds managed by the Group. 
 
The funds which Ashmore manages remain predominately sourced from institutional 
investors, including pension plans, government agencies, financial institutions 
and corporates. As at 30 June 2007, 85% of the Group's AuM was institutional 
(2006: 89%), and 15% (2006: 11%) was high net worth individuals /retail. The 
increase in high net worth individuals/retail reflects, in part, the new fund 
launched in the year targeting Japanese retail investors. The investor profile 
within the institutional segment showed an increase in the proportion of 
government investors (up from 9% to 12%) and a decline in bank investors (22% to 
17%). Public pension plan investors increased from 16% to 18% while the 
proportion of corporate pension investors reduced from 22% to 16%. 
 
The geographic profile of the Group's investors remains diversified. During the 
year there was strong asset gathering in Europe, including a number of 
significant mandate wins in the UK. 
 
 
Cash flow and balance sheet 
 
The Group has strong cash generative characteristics as demonstrated by the 
£85.3 million increase in the Group's cash balances during the year to £218.0 
million as at 30 June 2007. The needs for a strong balance sheet remain: to 
support regulatory capital requirements, to meet the commercial demands of 
current and prospective investors, and the development needs of the business, 
including seeding of new funds/initiatives. As part of the process of developing 
its presence in local emerging markets, a certain proportion of the Group's 
capital resources may be utilised for such purposes. 
 
The Group's policy remains that, should the Group accumulate cash which is 
surplus to that required to meet its continuing obligations and to fund future 
growth, consideration will be given to returning surplus cash and capital to 
shareholders in an appropriate manner. 
 
As at 30 June 2007, total equity was £196.0 million compared to £96.6 million at 
30 June 2006. There is no debt on the Group's balance sheet. 
 
 
Dividend 
 
As a result of the highly cash generative nature of the business, subject to 
shareholder approval, a final dividend of 6.7p per share is proposed to be paid 
on 7 December 2007 to shareholders on the register on 9 November 2007, the 
ex-dividend date being 7 November 2007. An interim dividend for the six-month 
period to 31 December 2006 of 2.3p was paid on 27 April 2007. This would result 
in a full-year dividend of 9.0p. The Company's intention is for its dividend 
policy to be progressive. 
 
 
US$/£ exchange rate 
 
The results for the year ended 30 June 2007 were achieved against the backdrop 
of a weaker US$/£ exchange rate. As the majority of the Group's revenue is 
denominated in US dollars and its costs in sterling, this has impacted on the 
Group's reported profit. Reported profit before tax increased by £27.5 million, 
a 26% increase over the prior year. In constant exchange rate terms, profit 
before tax increased by 36%. This was after restating the prior year figures at 
the current year's average US$/£ exchange rate (2007 US$/£ 1.95; 2006 US$/£ 
1.78).This resulted in the following restatements to the prior year numbers: 
lower net revenue in sterling terms (£11.4 million), net hedging gains excluded 
(£0.9 million), and a notional reworking of the variable compensation cost to 
reflect the above items (a £3.0 million reduction). In the current year, £2.7 
million of net hedging gains were excluded. On this basis, the net impact of the 
movement in the US$/£ exchange rate on the reported increase in profit before 
tax in the year of £27.5 million was £6.6 million. 
 
 
Taxation 
 
The vast majority of the Group's profit is subject to UK taxation and typically 
the Group has a limited number of non-tax deductible expenses. Consequently the 
Group's effective tax rate has historically tracked close to the 30% UK 
statutory tax rate. The introduction of a 28% corporation tax rate from 1 April 
2008 will have a small beneficial impact on the Group's effective corporation 
tax rate in the financial year to 30 June 2008, with the full-year benefit in 
the following financial year. 
 
There is a £14.4 million deferred tax asset on the Group's balance sheet at 30 
June 2007.  This is largely due to cash tax deductions which will arise over the 
next seven or so years in respect of share price appreciation on share-based 
payments awards. 
 
 
Strategy 
 
The Group's strategy is to be the leading emerging markets investment manager by 
maintaining a market-leading investment track record, delivering growth and 
enhancing diversification of earnings, facilitating such controlled growth and 
developing further the Ashmore brand and business model. 
 
These results demonstrate very clearly the progress that the Group has made in 
the year towards its strategic objectives. Substantial growth in AuM, revenue 
and profit has been achieved while progress continues in diversifying the 
Group's AuM by investment theme, geography, fund structure, risk/return profile, 
duration and investor type (institutional/high net worth individuals/retail and 
within institutional). 
 
The Group continues to research new opportunities to diversify further and to 
continue to grow the Group's investment themes and earnings streams, and to 
access the growing domestic capital pools within selected emerging markets. This 
may result in the Group using a proportion of its resources as seed capital for 
new fund launches/initiatives. 
 
 
Annual performance fees for August 2007 fund year ends 
 
Annual performance fees (unaudited) for the funds with year ends at 31 August 
2007 (EMLIP, LCD and ARD) were £17.6 million (2006: £0.3 million) and these will 
be recognised within revenue in the six months to 31 December 2007. 
 
 
Outlook 
 
The Group remains focused on delivering long-term investment out-performance, 
generating net management fee income through the attraction of net subscriptions 
across its investment themes and developing the Ashmore brand and business 
model. 
 
Despite continuing market volatility, trading conditions across the Group's 
investment themes during the last quarter of the 2007 financial year and into 
the start of the 2008 financial year remain satisfactory. The Group continues to 
believe that strong macro-economic, demographic and political factors, together 
with enhanced liquidity, index weighting and credit worthiness in the Group's 
markets will continue to underpin long-term growth across emerging market 
classes. 
 
These factors, together with Ashmore's experience and expertise in emerging 
markets investment management, position the Group well to benefit from further 
demand for emerging market investment management products and to continue its 
growth momentum into the 2008 financial year. 
 
 
About Ashmore Group plc 
 
Ashmore is one of the world's leading emerging market investment managers with a 
history of consistently outperforming the market. Ashmore currently specialises 
in a number of emerging market investment themes: dollar denominated debt, local 
currency and local currency debt, special situations incorporating distressed 
debt / private equity, and public equity. 
 
 
More information is available on the Group's website www. ashmoregroup.com. 
 
 
 
Ashmore Group plc 
Consolidated income statement 
Year ended 30 June 2007 
 
 
 
                                                                        2007             2006 
                                                 Notes                    £m               £m 
_____________________________________________________________________________________________ 
 
Management fees                                                        130.2             80.8 
Performance fees                                                        20.4             54.2 
Other revenue                                                           13.0              2.9 
_____________________________________________________________________________________________ 
 
Total revenue                                                          163.6            137.9 
Less: Distribution costs                                               (3.8)            (2.3) 
_____________________________________________________________________________________________ 
 
Net revenue                                                            159.8            135.6 
 
Personnel expenses                                 2                  (32.6)           (34.4) 
Other expenses                                                         (5.5)            (6.5) 
_____________________________________________________________________________________________ 
 
Operating profit                                                       121.7             94.7 
 
Gain on sale of business                                                   -              2.8 
Interest income                                                          9.7              6.5 
Interest expense                                                           -            (0.1) 
_____________________________________________________________________________________________ 
 
Profit before tax                                                      131.4            103.9 
 
Income tax expense                                                    (39.9)           (32.3) 
_____________________________________________________________________________________________ 
 
Profit for the year                                                     91.5             71.6 
 
============================================================================================= 
 
 
Attributable to: 
 
Equity holders of the parent                                            91.4             71.5 
Minority interest                                                        0.1              0.1 
_____________________________________________________________________________________________ 
 
Profit for the year                                                     91.5             71.6 
 
============================================================================================= 
 
 
Earnings per share: 
 
Basic                                              3                   13.7p            10.8p 
Diluted                                            3                   12.9p            10.4p 
 
 
 
 
Ashmore Group plc 
Consolidated balance sheet 
 
                                                                           As at         As at 
                                                                         30 June       30 June 
                                                                            2007          2006 
                                                      Note                    £m            £m 
______________________________________________________________________________________________ 
 
Assets 
Property, plant and equipment                                                0.2           0.2 
Intangible assets                                                            4.1           4.1 
Other receivables                                                            0.1           3.6 
Deferred tax asset                                                          14.4           1.6 
______________________________________________________________________________________________ 
 
Total non-current assets                                                    18.8           9.5 
______________________________________________________________________________________________ 
 
Trade and other receivables                                                 27.2          20.0 
Derivative financial instruments                                             0.5           1.3 
Cash and cash equivalents                                                  218.0         132.7 
 
Total current assets                                                       245.7         154.0 
 
Total assets                                                               264.5         163.5 
 
Equity 
Issued capital                                         5                       -             - 
Share premium                                                                0.3           0.3 
Retained earnings                                                          195.6          96.3 
______________________________________________________________________________________________ 
 
Total equity attributable to equity holders of the           
parent                                                                     195.9          96.6 
 
Minority interest                                                            0.1             - 
 
______________________________________________________________________________________________ 
 
Total equity                                                               196.0          96.6 
______________________________________________________________________________________________ 
 
Liabilities 
 
Deferred tax liabilities                                                       -           0.1 
______________________________________________________________________________________________ 
 
Total non-current liabilities                                                  -           0.1 
______________________________________________________________________________________________ 
 
Current tax                                                                 15.7          18.0 
Derivative financial instruments                                               -           0.1 
Trade and other payables                                                    52.8          48.7 
______________________________________________________________________________________________ 
 
Total current liabilities                                                   68.5          66.8 
______________________________________________________________________________________________ 
 
Total liabilities                                                           68.5          66.9 
______________________________________________________________________________________________ 
 
Total equity and liabilities                                               264.5         163.5 
============================================================================================== 
 
 
 
Ashmore Group plc 
Consolidated statement of changes in equity 
 
                                                                    Total equity 
                                                                    attributable 
                                                                       to equity 
                                 Issued        Share     Retained holders of the  Minority        Total                 
                                capital      premium     earnings         parent  interest       equity                
                                     £m           £m           £m             £m        £m           £m 
_______________________________________________________________________________________________________ 
 
Balance at 1 July 2005                -          0.3         69.1           69.4       0.5         69.9 
 
Profit for the year                   -            -         71.5           71.5       0.1         71.6 
Share-based payments                  -            -         10.7           10.7         -         10.7 
Disposal of business                  -            -            -              -     (0.6)        (0.6) 
Dividends                             -            -       (55.0)         (55.0)         -       (55.0) 
_______________________________________________________________________________________________________ 
 
Balance at 30 June 2006               -          0.3         96.3           96.6         -         96.6 
 
Profit for the year                   -            -         91.4           91.4       0.1         91.5 
Share-based payments                  -            -          6.5            6.5         -          6.5 
Current tax                           -            -          4.2            4.2         -          4.2 
Deferred tax related to               -            -         11.6           11.6         -         11.6 
share-based payments 
Sale of own shares held               -            -          1.1            1.1         -          1.1 
Dividends                             -            -       (15.5)         (15.5)         -       (15.5) 
_______________________________________________________________________________________________________ 
 
Balance at 30 June 2007               -          0.3        195.6          195.9       0.1        196.0 
======================================================================================================= 
 
 
 
Ashmore Group plc 
Consolidated cash flow statement 
Year ended 30 June 2007 
 
                                                                                2007            2006 
                                                            Note                  £m              £m 
____________________________________________________________________________________________________ 
 
Operating activities 
 
Cash receipts from customers                                                   164.6           151.7 
Cash paid to suppliers and employees                                          (32.3)          (34.7) 
____________________________________________________________________________________________________ 
Cash generated from operations                                                 132.3           117.0 
 
Income taxes paid                                                             (39.2)          (22.7) 
____________________________________________________________________________________________________ 
 
Net cash from operating activities                                              93.1            94.3 
____________________________________________________________________________________________________ 
 
Investing activities 
Interest received                                                                9.5             6.1 
Dividends received                                                                 -             1.4 
 
Net proceeds from disposal of subsidiary                                           -           (0.2) 
Purchase of property, plant and equipment                                      (0.1)               - 
____________________________________________________________________________________________________ 
 
Net cash from investing activities                                               9.4             7.3 
____________________________________________________________________________________________________ 
 
Financing activities 
 
Dividends paid                                               4                (15.5)          (55.0) 
___________________________________________________________________________________________________ 
 
Net cash used in financing activities                                         (15.5)          (55.0) 
___________________________________________________________________________________________________ 
 
Effect of exchange rate changes on cash and cash                               (1.7)           (0.5) 
equivalents 
____________________________________________________________________________________________________ 
 
Net increase in cash and cash equivalents                                       85.3            46.1 
 
Cash and cash equivalents at beginning of year                                 132.7            86.6 
____________________________________________________________________________________________________ 
 
Cash and cash equivalents at end of year                                       218.0           132.7 
==================================================================================================== 
 
Cash and cash equivalents comprise: 
Cash at bank and in hand as shown in balance sheet                             218.0           132.7 
____________________________________________________________________________________________________                     
                    
                                                                               218.0           132.7 
==================================================================================================== 
 
 
 
Notes to the Group financial statements 
 
1)   Basis of preparation and significant accounting policies 
 
In preparing the financial information in this statement the Group has applied 
policies which are in accordance with IFRSs as adopted by the European Union at 
30 June 2007. The accounting policies applied in these financial statements are 
consistent with those applied in the Group's prospectus, prior to listing on the 
London Stock Exchange on 12 October 2006, for the year ended 30 June 2006. The 
prospectus is available on the Group's website. 
 
 
2)   Personnel expenses 
 
Number of employees 
The number of employees of the Group (including executive directors) during the reporting 
years, analysed by category, was as follows: 
 
 
                               Average for the      Average for 
                                          year              the     
                                         ended       year ended          As at            As at                     
                                       30 June          30 June        30 June          30 June              
                                          2007             2006           2007             2006             
                                        Number           Number         Number           Number 
_______________________________________________________________________________________________ 
 
Investment management                       59               42             69               49 
Fund administration                          -                6              -                - 
_______________________________________________________________________________________________ 
 
Total employees                             59               48             69               49 
_______________________________________________________________________________________________ 
 
 
The fund administration employees in the above table relate to the employees of 
International Administration (Guernsey) Limited which was sold on 30 December 
2005. 
 
 
Analysis of employee benefits expense 
                                                                  Year ended          Year ended 
                                                                     30 June             30 June 
                                                                        2007                2006 
                                                                          £m                  £m 
________________________________________________________________________________________________ 
 
Wages and salaries                                                       3.8                 3.0 
Share-based payments                                                     5.7                 6.8 
Performance related bonuses                                             21.7                23.6 
Social security costs                                                    0.5                 0.3 
Pension costs                                                            0.2                 0.2 
Other costs                                                              0.7                 0.5 
________________________________________________________________________________________________ 
 
Total employee benefits                                                 32.6                34.4 
________________________________________________________________________________________________ 
 
 
 
 
3)   Earnings per share 
 
Basic earnings per share is calculated by dividing the profit for the year 
attributable to equity holders of the parent by the weighted average number of 
ordinary shares in issue during the year. 
 
Diluted earnings per share is calculated as for basic earnings per share with a 
further adjustment to the weighted average number of ordinary shares to reflect 
the effects of all dilutive potential ordinary shares. 
 
There is no difference between the profit for the year attributable to equity 
holders of the parent used in the basic and diluted earnings per share 
calculations. 
 
Reconciliation of the figures used in calculating basic and diluted earnings per 
share: 
 
 
                                                                  Year ended          Year ended 
                                                                     30 June             30 June 
                                                                        2007                2006 
________________________________________________________________________________________________ 
Weighted average number of ordinary shares used in             
calculation of basic earnings per share                          667,467,808         660,200,000 
Effect of dilutive potential ordinary shares - share     
options                                                           38,827,815          26,859,915 
________________________________________________________________________________________________ 
 
Weighted average number of ordinary shares used in              
calculation of diluted earnings per share                        706,295,623         687,059,915 
________________________________________________________________________________________________ 
 
 
 
4)    Dividends 
 
 
An analysis of dividends paid is as follows: 
 
 
Group and Company                                                   Year ended       Year ended 
                                                                       30 June          30 June 
                                                                          2007             2006 
_______________________________________________________________________________________________ 
 
Interim dividend                                                        £15.5m           £55.0m 
 
Dividend per share                                                       2.30p            8.33p 
_______________________________________________________________________________________________ 
 
Dividends are recognised in the accounts in the year in which they are paid, or 
in the case of a final dividend when approved by the shareholders. 
 
On 12 September 2007 the board proposed a final dividend of 6.7p per share for 
the year ended 30 June 2007. This has not been recognised as a liability of the 
Group at the year end as it has not yet been approved by shareholders. Based on 
the number of shares in issue at the year end which qualify to receive a 
dividend, the total amount payable would be £44.7m. 
 
 
 
5)    Share capital 
 
 
Group and Company 
(a) Share capital authorised 
 
 
                                         As at            As at           As at           As at 
                                       30 June          30 June         30 June         30 June 
                                          2007             2007            2006            2006 
                                     Number of    Nominal value       Number of   Nominal value 
                                        shares            £'000          shares           £'000                          
_______________________________________________________________________________________________                          
                                                                     
Ordinary shares of 0.01p each      900,000,000               90     900,000,000              90 
_______________________________________________________________________________________________ 
 
(b) Share capital issued 
Allotted, called up and fully paid equity 
shares: 
 
 
                                         As at            As at           As at           As at 
                                       30 June          30 June         30 June         30 June 
                                          2007             2007            2006            2006 
                                     Number of    Nominal value       Number of   Nominal value 
                                        shares            £'000          shares           £'000                          
_______________________________________________________________________________________________ 
 
Ordinary shares of 0.01p each      708,925,000               70     708,925,000              70 
_______________________________________________________________________________________________ 
 
 
All the above ordinary shares represent equity of the Company and rank pari 
passu in respect of participation and voting rights. 
 
At 30 June 2006 there were 46,225,000 options in issue with contingent rights to 
the allotment of ordinary shares of 0.01p in the Company. The exercise period 
for these options ranges from December 2005 to April 2016 and the allotment 
price ranges from 0.52p to 24.24p. 
 
At 30 June 2007 there were 38,152,921 options in issue with contingent rights to 
the allotment of ordinary shares of 0.01p in the Company. The exercise period 
for these options ranges from December 2005 to December 2016 and the allotment 
price ranges from 0.52p to 170.0p. There are also restricted share awards issued 
under the Ashmore First Discretionary Share Option Scheme totalling 2,009,522 
shares that have a release date in November 2011. 
 
 
6)     Own shares 
 
The Ashmore 2004 Employee Benefit Trust (EBT) was established to encourage and 
facilitate the acquisition and holding of shares in the Company by the employees 
of the Company with a view to facilitating the recruitment and motivation of the 
employees of the Company. As at the period end, the EBT owned 38,725,000 (June 
2006: 48,725,000) ordinary shares of 0.01p with a nominal value of £3,872.50 
(June 2006: £4,872.50) and shareholders' funds are reduced by £5.9m (June 2006: 
£4.8m) in this respect. It is the intention to make these shares available to 
employees by way of sale through the share option scheme. 
 
 
 
7)      Exchange rates 
 
 
The only foreign exchange rate which has a material impact on the reporting of 
the Group's results is the US dollar. 
 
                                Closing rate     Closing rate     Average rate     Average rate 
                                       as at            as at      year  ended       year ended 
                                30 June 2007     30 June 2006     30 June 2007     30 June 2006 
_______________________________________________________________________________________________ 
 
US dollar                             2.0088           1.8484           1.9466           1.7806 
_______________________________________________________________________________________________ 
 
 
 
 
                      This information is provided by RNS 
            The company news service from the London Stock Exchange 
END 
 
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