F&C Asset Management recorded its first pre-tax profit in three years for the six months to June 30, but cut its dividend by more than analysts had expected as part of its three year investment plan to restore the UK fund manager to greater profitability.

Pre-tax profit in the first half was £7.9m (€11.6m), compared to a loss of £29.2m in the same period last year. The average fee rate increased from 22 basis points to 23.5 basis points over the same period, but operating margins fell to 30.5%, down from 41% last year.