The financial services group said while market-maker Winterflood's saw a similar level of daily trades in the five months to December to the previous year, increased market volatility and reduced retail investor risk appetite had "significantly reduced" income per trade.

In contrast, the bank loan book increased by 9% in the five months to December to £3.8 billion with demand described as good across the portfolio. 

Net interest margin had remained strong and close to the level in the second half of the previous financial year, while the bad debt ratio remained stable. 

The asset management division recorded a small loss in the period, while funds under management fell by £1.2 billion to £8.4 billion over the five months.

Close said the drop reflected institutional redemptions and private client money under management rose slightly to £6.7 billion.

“Financial market conditions have remained difficult in January and are uncertain for the second half of the financial year.  However, our businesses remain well positioned and we continue to see a strong performance in the Banking division,” Close added. 

Half year results for the six months to January wil be published on 13 March.

Economic uncertainty in Europe and the US continued depressing investor confidence in the final quarter of 2011, leading to another decline in Man Group’s (LON:EMG) assets.

Despite the lacklustre figures, Man Group emerged among the top risers in the FTSE 100 index this morning as the markets welcomed the group's plans to save an additional US$75 million this year.

The hedge fund manager saw its funds under management (FUM) drop from US$64.5 billion at the end of September to US$58.4 billion at the end of the year as net outflows reached US$2.5 billion.

Sales at Man reached US$3.1 billion during the quarter, while redemptions amounted to US$5.6 billion.

“Trading conditions have been tough for Man in the second half of 2011. Investment performance varied significantly across styles, with market volatility and reduced market liquidity impacting trading opportunities,” said chief executive of Man Group Peter Clarke.

Man said today that it will address the “tough trading conditions” by implementing a further US$75 million of cost cuts by the end of 2012 on top of the previously announced US$40 million in cost savings, which are on track for 2012.

“With a strong capital base and continued focus on efficiency and performance, we are well placed to benefit when investor demand improves,” said Clarke.

Shares in Man rallied 5.9 pence to 113 pence by 8:20 am, giving the company a market cap of £1.95 billion.

The FUM reported by Man Group missed Arbuthnot’s forecasts by 11.6 percent, which the broker said may prompt it to reduce its 2012 forecasts for the group. Forecasts by Numis were more conservative, but also turned out to be above the actual FUM by US$0.7 billion.

Arbuthnot analyst Michael Loungo added that volatility in the group’s assets is likely to continue, also noting that negative investment performance slashed Man’s assets by US$1.5 billion during the quarter, pressuring its performance fees.

On a positive note, Loungo said significant caution is already priced into the current valuation and a new dividend policy along with cost cuts could serve as catalysts for share price recovery this year.

“Weak actual and forecast financial performance has obviously weighed heavily on Man Group's share price, and for the second time since initiation in July 2011, we are likely to revise downward our estimates,” said Loungo.

“A material recovery in share price is unlikely without a significant turnaround in financial performance.”

KEY POINTS
- Horseshoe Metals has discovered consistent sulphide Copper mineralisation at Kumarina.
- Copper grades averaging better than 2% over true widths of up to 20 metres, intersected over 300 metres of strike length in a maiden drilling program, indicate the Kumarina project has substantial tonnage potential.
- Kumarina is in a belt not previously considered highly for commercial mineral discoveries. After Horseshoe Metals’ early work, and the success of others in the wider region, Kumarina now deserves some well funded, determined exploration.
- Horseshoe Metals began a follow up drilling program at Kumarina in December 2011.
- Horseshoe Metals almost doubled the Copper resources at Horseshoe Lights in 2010, to 91,000 tonnes of Copper.
- Forthcoming drill programs will test several opportunities to further increase resources at Horseshoe Lights. Massive sulphide prospects south-east of the pit are likely to be the headline acts.
- The bulk of Horseshoe Lights resources and drill targets are in compact open pit positions within a mining lease. Even moderate success in drilling the known targets could see the project past the economic threshold.

Craven House Capital (LON:CRV) this afternoon announced it has made a further investment Pressfit Holdings, a manufacturer of steel press fittings.

It is buying just shy of 1.4 million shares in the un-quoted company for £137,000. This will be paid in Craven House shares. The deal gives Craven House a 4.5 per cent stake in Pressfit.

Pressfit makes thin walled steel press fittings that are used in water and gas applications.

“We are very excited about Pressfit's growth prospects as it expands its client base throughout China and into Europe. Pressfit benefits from an excellent management team and a disciplined growth strategy founded on their distinct competitive advantages,” said acting chairman Mark Pajak.

“In addition, we very pleased to secure this investment utilising our shares as currency - a clearly defined and central aspect of our investment strategy.”

He added: “We view our investment in Pressfit as a long-term strategic holding and we look forward to supporting this company further as they deliver on their plans for growth."

In September the firm provided a £95,000 convertible loan to Pressfit. This can be converted into 961,849 Pressfit shares, which would represent 3 per cent of the company. The loan also pays interest at 8 per cent a year.

Broker Daniel Stewart (LON:DAN) today became the latest small-cap focused broker to slide into the red due to weak financial markets hitting the number of company deals.

Interim losses soared to £606,000 compared to a profit of £1 million in the previous half year.

The small and medium cap specialist said the first quarter started well but the second three months from July to September proved to be particularly slow.

Timing delays were part of the problem said Stewart, which has been investing heavily in Asia. International transactions take longer to execute than similar UK or European deals, it said.

Since the half-year the broker added it had completed a number of transactions originally anticipated for the first half including several Asian listings. 

Revenue for the six months to September increased from £3.5 million to £3.6 million, but the broker said the costs of the international development were higher than planned and combined with a staff retention plan and share based payments this produced an underlying after tax loss of £144,000 against a profit of £191,000 in the previous first half.

The broker said it remains “very confident about a positive outcome for the year,” adding that its investment in Asia will assist in sustaining the business should the economic outlook in Western Europe remain bleak.

- adds broker comment

S&U (LON:SUS) is showing good strength in the downturn says broker Arden after a trading update today from the credit provider.

Management is concentrating on tighter controls given the difficult economic environment but home credit still continues to grow modestly, with motor finance growing faster and at good payment rates.

The broker expects profits for the full year to January to rise from £9.9 million to £10.8 million, which drops the earnings multiple from 10 to nine at 598p.

The shares also yield a prospective 6.4% and the good trading strength coupled with the yield bode well for the share price suggests Arden, which has a buy rating.

In its trading update, S&U said current trading is strong despite the problems affecting the wider economy.

Both its home credit arm Loansathome4u and motor finance business Advantage saw customer numbers rise in the four months to December 8.

In home credit, customers rose by just under 2% compared to this time last year. Debt quality improved, the firm said, with the group also confident about the Christmas season.

In motor finance, customer numbers rose by 12% on last year and despite some lenders returning to the market, sales growth is strong and margins have improved, S&U said.

It added that Advantage's debt quality is at its highest level ever, while monthly customer repayments now average a regular £2.5 million and impairment rates continue to fall.

Overall, group borrowing fell in the quarter with good collections and cost control enabling it to repay a medium term loan ahead of schedule.

Chairman Anthony Coombs said: "Whilst it would be unwise in the current economic climate to take Christmas sales and collections for granted, current trading is strong and underpinned by a solid financial base. Expectations and group morale are high."

Loansathome4u provides home credit via 500 agents across the UK, while Advantage employs over 70 people and has provided motor finance for over 40,000 customers across the country.

Both its home credit arm Loansathome4u and motor finance business Advantage saw customer numbers rise in the four months to December 8.

In home credit, customers rose by just under 2% compared to this time last year. Debt quality also continues to improve, the firm said, with the group confident about the Christmas season.

In motor finance, customer numbers are over 12% up on last year and despite some lenders returning to the market, sales growth is strong and margins have improved S&U said.

It added that Advantage's debt quality is at its highest level ever, while monthly customer repayments now average a regular £2.5 million and impairment rates continue to fall.

Overall, group borrowing fell in the quarter with good collections and cost control enabling it to repay a medium term loan ahead of schedule.

Chairman Anthony Coombs, said: "Whilst it would be unwise in the current economic climate to take Christmas sales and collections for granted, current trading is strong and underpinned by a solid financial base. Expectations and group morale are high."

Loansathome4u provides home credit via 500 agents across the UK, while Advantage employs over 70 people and has provided motor finance for over 40,000 customers across the country.

ItN Nanovation joins the growing ranks of nanotechnology companies following scientific breakthroughs in the 1990s. It was formed in 2000 and went public in 2006. The Nanostart portfolio company produces high-performance ceramic water filters for industrial customers with nanoparticles as building blocks. These ceramic filters are more efficient than standard products, allowing for both energy and cost savings. The ceramic material's high stability opens up an array of possible uses for the filter including municipal sewage and wastewater treatment, pretreatment of sea water for desalination, the beverage industry, and separation of oil contaminants from water. ItN also uses its technology to create ceramic coatings as protective layers and catalysts with utility in industries ranging from aluminum foundries to coal-fired power plants. 

On October 20, Nanostart-holding ItN announced the finalization of a joint venture with Saudi-Arabian partner Juffali and a consortium of German industrial investors. A preliminary agreement from the previous year had been fully hashed out after intense negotiations. The new venture will be called Saudi Water Nanovation LLC and will distribute ItN Nanovation's ceramic flat membranes, or CFM Systems along with corresponding accessories in the Middle East and North Africa. 

The deal calls for the establishment of a dedicated CFM manufacturing facility with production to occur locally in Saudi Arabia. Final construction is expected in 2014 while production may start by 2013. Once complete, ItN's capacity will be increased three fold.

Nanostart-held ItN will have an initial 17.5 percent stake in the joint venture and recognize $2.35 million in income as advance payment for a limited contribution of production expertise. Two-thirds of this payment will be used to acquire its initial stake. Once the business license for this venture has been granted by the Saudi government, ItN will recognize the payment as other operating income. A license is expected by the end of 2011. The contract also gives ItN the option to increase its stake to 40% if exercised by 2015. 

Furthermore, ItN will receive revenue-based royalties and share in the earnings from the operation. CFM Systems produced under the Saudi Water Nanovation venture will be used for pre-filtration as part of the reverse osmosis process in the treatment of drinking water. 

The Middle-East and North Africa represents a core market for water filtration due to its arid environment and lack of surface fresh water. Nanostart-holding ItN Nanovation's new joint venture gives it a local presence with production facilities and an improved ability to address this important region. The collaboration provides additional validation of ItN's ceramic technology. At the same time, it allowed the company to ramp up mass production of the CFM Systems. 

Benefits of the joint venture go both ways. Dry Saudi Arabia has virtually no natural surface lakes or rivers, while annual precipitation is around 10 cm. Nearly all drinking water comes from deep underground wells; the initial quality of this water is poor and not suitable for consumption due largely to a high salt content. With a large and growing population, the Kingdom is in constant need of clean drinking water.

Salt removal is done through a process called reverse osmosis whereby semi-permeable membranes are used to trap salt molecules. Because these membranes are extremely delicate and expensive, a pre-filtration step used to remove larger particles such as dissolved metals. Nanostart’s portfolio company has developed a technique to precipitate these large particles into a sludge, then filter them off with the ceramic flat filters. The high quality filters protect and prolong the life of the reverse osmosis membranes. 

A nine month pilot study by ItN Nanovation demonstrated its filters to be superior to both conventional polymer and simple sand filters. It withstood the harsh conditions of Saudi Arabia's high temperature, high-salt well water showing a much longer lifetime while at the same time requiring less maintenance. And unlike other filters, the ItN filters can be back-flushed. According to the company, efficiency is four and a half times better than products from competing top manufacturers. 

While we in Western society take fresh water for granted, it is truly a commodity in much of the world. It is estimated a billion people suffer from water shortages. Water filtration products from Nanostart-held  ItN Nanovation can be part of the solution.

Neil Marston, Horseshoe Metals managing director, told Proactive Investors today “the company has been working towards this drilling program for several months now so we are looking forward to the drilling results as they become available.”

The program consists of 40 holes, each between 50-100 metres deep, for a total of about 3,000 metres of drilling.

The drilling targets were generated from the March 2011 airborne magnetic and radiometric survey, from ground-based sub-audio magnetic and gradient array induced polarisation surveys and a reconnaissance soil and rock chip sampling program.

Many of the drill targets identified are associated with north-east trending shear zones and some coincide with old copper workings. The copper deposits at the Kumarina Project were discovered in 1913 and worked intermittently until 1973.

Records indicate that the Kumarina Copper mine was the second largest producer in the Bangemall Basin group of copper mines. Recorded production to the late 1960s is 481 tonnes of copper ore at a high-grade of 37.0% copper and 2,340 tonnes at a grade of 17.51% copper.

Horseshoe expects to receive the first laboratory analysis results from the program in late November 2011.