Aberdeen share price: six month profits fall 3% as clients withdraw £3.9bn from funds

on May 6, 2014
Updated: Jun 1, 2022

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

UK investment manager Aberdeen Asset Management (ADN) saw six month profits fall 3%. The FTSE 100 company said it made £217m, down from £222.8m in the same period last year. Clients withdrew £3.9bn out of funds, including core emerging market and Asian equity.

Profit before taxation for the period was £168.7 million (2013: £188.2 million). Underlying profit, stated before amortisation of intangible assets and exceptional costs in respect of the SWIP acquisition, was £217.0 million, compared to £222.8 million in 2013. This represents underlying earnings per share, on a diluted basis, of 14.32p (2013:14.88p).

The Board has decided to pay an interim dividend of 6.75p per share, an increase of 12.5% on the interim dividend announced last year which will be paid on 19 June 2014 to qualifying shareholders on the register at 16 May 2014.
This increase is in line with the Board’s objective to pay a growing dividend each year.
Net revenue for the period decreased by 2% to £503.5 million (2013: £516.0 million). Recurring fee income was little changed at £491.1 million (2013: £492.5 million), while performance fees contributed £12.4 million (2013: £23.5 million). The blended average management fee rate remained steady at 50.0 basis points (year to September 2013: 50.0 basis points).

Operating costs of £286.9 million fell by 1% compared to the equivalent period last year, and were 4% lower than for the second half of our last financial year, and we have been proactive in identifying and implementing further cost savings over and above the synergies expected from the SWIP transaction.
The Group’s operating margin for the period was 43.0% (2013: 43.8%).

We generated £221.6 million of core operating cashflow (2013: £221.2 million), representing a conversion rate of underlying operating profit of 102% (2013: 98%), and ended the period with a cash position of £410.4 million.
As we stated when we announced the transaction, the addition of SWIP will reinforce Aberdeen’s progressive dividend policy and, while we will incur some one-off integration costs over the next year, it will enhance our ability to return surplus capital to shareholders over time.

Martin Gilbert, Chief Executive of Aberdeen Asset Management, commented:
“Aberdeen has delivered a resilient set of numbers in this half year, given the difficult backdrop for emerging markets. Our disciplined investment approach, long-term investment track record and tradition of client service have enabled us to limit equity outflows whilst we have continued to win mandates in other asset classes, such as fixed income and property.
“There are signs of a pick-up in sentiment towards emerging economies, as investors are again identifying opportunities and recognising the fundamental strengths of these markets. Equally encouraging is the healthy improvement in the relative performance of our key equity products so far this year.
“At the end of March we were delighted to complete our acquisition of SWIP and the process of integrating the business is proceeding as planned. The deal adds scale and strengthens further our broad range of investment capabilities and confirms Aberdeen’s position as one of the world’s leading asset management groups.”
**As of 06.05.2014 at BST 08:00 buy Aberdeen shares at 450.00p**
**As of 06.05.2014 BST 08:00 sell Aberdeen shares at 420.00p**


Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals™.

Learn more
Finance & Banking Stock Market