BT profits surge as shares finally recover PROFITS at BT Investment Management rose by nearly half in the year to June, the company announced yesterday, days after its shares surpassed their December 2007 float price for the first time. Chief executive Emilio Gonzalez acknowledged that the spinoff from Westpac at $4.80 a share just before global markets peaked in December 2007 was unfortunate, but said total shareholder return since the float had been 23 per cent, compared with a 1 per cent equivalent for the S&P/ASX300 accumulation index. His company, now 70 per cent owned by Westpac and 13 per cent held by staff, made a net profit for the full year to June 30 of $61.9 million, comfortably eclipsing the $41.5 million reported in October last year. Aside from operating a funds management business in Australia, BTIM owns the London-based JO Hambro Capital Management business that it bought in mid- 2011 for a relatively modest $314m. Statutory net profit was $512.2m, an increase of 139 per cent from the previous reported figure of $21.4m. Mr Gonzalez said the previous number had been held down by transactions relating to the Hambro acquisition. The group reported strong net capital inflows from the Hambro business, where $3 billion was raised via the higher margin wholesale channel, while BTIM (Australia) experienced net portfolio outflows of $1.5bn, which management attributed to structural decline in its legacy book. Mr Gonzalez said the outflows were a runoff from products sold before the introduction of platforms in the late 1990s that were no longer sold. Mr Gonzalez said overall, "our current funds under management position is 13 per cent higher than the average levels through the 2012-13 financial year. We have growth momentum in the JO Hambro business and are encouraged by recent positive fund flows into BTIM Australia via the wholesale channel. BTIM has declared a final dividend of 10c a share, bringing total dividends for the year to 18c, up 44c from the previous year. The final divided is 50 per cent franked, reflecting the increasing contribution from the Hambro business, although the half-year dividend was 100 per cent franked thanks to BTIM using up its franking credits. "The average franking for the year just ended will be about 72 per cent," Mr Gonzalez said.Shares fell 2.16 per cent yesterday to $4.99.