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Financial Highlights

On 30 March 2007 the Group Board announced the proposed Initial Public Offering on the New York Stock Exchange of a majority interest in Brokerage, to be renamed ‘MF Global’. The IPO is expected to take place in the third calendar quarter of 2007, subject to shareholder approval and market conditions remaining favourable. As a result, Brokerage has been reclassified as a discontinued operation in these financial statements. Following the IPO, and subject to shareholder approval, the net proceeds will be distributed to shareholders in the fourth quarter of the calendar year. Also at this time the Board will inform shareholders of the appropriate changes to the Group’s capital management and distribution policy.
$61.7bn   63.9 cents#
Funds under management of $61.7 billion at 31 March 2007 (including private investor FUM of $36.6 billion), up 24% from last year   Diluted earnings per share on total operations* up 25% to 63.9 cents#
     
$257m   $15.9bn
Brokerage (discontinued operations)
profit before tax and exceptional items up 69% to $257 million		   Record fund sales in the year of $15.9 billion, including private investor sales of $8.6 billion
     
$943m   50.8 cents#
Recurring net management fee income up 34% to $943 million   Diluted underlying earnings per share†* up 42% to 50.8 cents#
     
$1,284m   $358m
Statutory profit after tax on total operations up 27% to $1,284 million   Net performance fee income down 20% to $358 million
     
20.0 cents   $1,301m
Dividends relating to the year up 40% in US dollar terms to 20.0 cents~   Profit before tax on Asset Management (continuing operations) up 13% to $1,301 million
     
55.4 cents   Over $65bn
Diluted earnings per share on continuing operations* up 15% to 55.4 cents   Post year-end development – funds under management currently estimated to be over $65 billion
     
* A reconciliation of earnings per share is shown in Note 9 to the financial statements.
† Underlying earnings per share represents earnings from net management fee income in Asset Management plus Brokerage net income.
It therefore excludes net performance fee income in Asset Management and exceptional items.
+ The exceptional items in Brokerage are discussed in the Financial Review on page 45.
~ Dividends per share represent the interim paid and final proposed dividends relating to the year.
# The Company sub-divided each ordinary share into six new ordinary shares with effect from 14 August 2006. The comparative earnings per share, dividends per share and number of shares in issue figures have been restated accordingly.
  March
2007		 March
2006
Funds under management $61.7bn $49.9bn
Asset Management net management fee income $943m $704m
Asset Management net performance fee income $358m $450m
Profit before tax – continuing operations $1,301m $1,154m
Brokerage – net income before exceptionals $257m $152m
Brokerage – exceptional items+ $6m ($70m)
Profit before tax on total operations $1,564m $1,236m
Taxation> ($280m) ($222m)
Statutory profit after tax $1,284m $1,014m
Diluted earnings per share*#    
Continuing operations 55.4c 48.3c
Total operations 63.9c 51.0c
Underlying†  – total operations 50.8c 35.7c
Underlying†  – continuing operations 42.0c 30.6c
Dividends per share~# 20.0c 14.3c
Post-tax return on equity 30.90% 33.50%
Equity shareholders’ funds $4,539m $3,569m
Diluted weighted average number of shares# 2,051m 2,056m
     
* A reconciliation of earnings per share is shown in Note 9 to the financial statements.
† Underlying earnings per share represents earnings from net management fee income in Asset Management plus Brokerage net income.
It therefore excludes net performance fee income in Asset Management and exceptional items.
+ The exceptional items in Brokerage are discussed in the Financial Review page.
> The 2007 taxation charge includes a $12 million charge relating to the exceptional items in Brokerage. The 2006 taxation charge includes a $42 million exceptional tax credit, $22 million of which relates to the exceptional items in Brokerage with the remainder relating to Asset Management.
~ Dividends per share represent the interim paid and final proposed dividends relating to the year.
# The Company sub-divided each ordinary share into six new ordinary shares with effect from 14 August 2006. The comparative earnings per share, dividends per share and number of shares in issue figures have been restated accordingly.