Treasury Group has recorded a 57 per cent drop in profit to $7.515 million for the 12 months to June 2009.

The boutique incubator announced its annual results this week and reported its consolidated net profit after tax was $4.953 million, a fall of 71 per cent after a change in accounting for certain investments.

According to Treasury Group, this fall in profitability reflects the impact from the decline in global financial markets and the direct flow on to the profitability of its underlying businesses.

"The past twelve months have been the toughest in the financial markets for 80 years," Treasury Group chairman Mike Fitzpatrick said.

"Treasury Group's earnings are driven by funds under management (FUM) and the mix of retail and institutional clients, and the fall in the market has had a dramatic effect on profitability."

Total FUM also took a battering, amounting to $10.93 billion, a decrease of $1.56 billion or 12.49 per cent on the previous corresponding year.

However, this compares to a fall in the All Ordinaries index of 26 per cent over the financial year ended 30 June 2009.

In order to manage its expenses Treasury Group has reduced staff by 10 per cent.

"One person has gone part time and we reduced head count by two," Treasury Group chief financial officer Joseph Ferragina said.

He would not comment on what the roles were, but said he does not expect any future staff changes.

On a more positive note there was no debt or falling valuations for the fund management companies that include Global Value Investors, RARE Infrastructure and Investors Mutual Limited.

There are also plans in the works to expand the manager line-up.

"I can't comment at this stage except to say that we're looking at opportunities," Ferragina said.

According to Fitzpatrick, the commitment to building the business is progressing well and the board expects to make announcements prior to Christmas.