Shares in Liontrust Asset Management (LSE:LIO) rose 12% to 329.1p after the fund manager reported improving client flows and progress on a planned acquisition, even as annual profit fell.
The independent fund management group said adjusted profit before tax dropped to £30.5 million in the year to 31 March, down from £48.3 million a year earlier.
Gross profit fell to £123 million from £157.7 million, with the revenue margin slipping to 0.55% from 0.60%.
Statutory profit before tax declined to £14.4 million from £22.3 million.
Adjusted diluted earnings came in at 36.7p a share, down from 56.8p.
The company held its full-year dividend at 19p.
Investors focused instead on signs of recovering flows and the imminent completion of a deal to expand the business.
Liontrust reported gross institutional inflows of more than £500 million in the quarter to 19 June, though it still recorded net outflows of £276 million over the period.
Assets under management and advice stood at £21.4 billion as at 19 June.
The Financial Conduct Authority has approved the change in control for River Global Holdings, with the acquisition expected to complete on 30 June.
River Global managed £2.96 billion as at 19 June and attracted net inflows of £39 million in the quarter.
Chief executive John Ions said the improvement in flows reflected the expansion of the company's distribution internationally and a broadening of client types.
He said the River Global acquisition would accelerate diversification by adding investment talent and styles, allowing Liontrust to broaden distribution and meet client demand it could not previously serve.
Ions added that the deal showed the scope to grow through selective acquisitions at the right price.
In a note following the results, Cavendish said: "We are encouraged by the strong cost control and improving flow trajectory."
The broker reiterated its 'buy' call and 440p price target.