6th May 2014 07:49
LONDON (Alliance News) - Aberdeen Asset Management PLC Tuesday said first-half pretax profit fell after net revenue came under pressure due to a decrease in fees received, while operating expenses also increased in what was a difficult period for emerging markets.
In a statement, Aberdeen, which completed the acquisition of Scottish Widows Investment Partnership Group Ltd from Lloyds Banking Group PLC at the end of the second-quarter, said pretax profit fell by 10% to GBP168.7 million in the six months ended March 31, compared with GBP188.2 million in the corresponding period a year earlier. Net revenue decreased by GBP12.5 million to GBP503.5 million due to declines in net management fees, performance fees and transaction fees.
Operating expenses increased by GBP10.7 million to GBP335.2 million as Aberdeen booked a GBP15.3 million cost related to the acquisition in the first-half.
The SWIP acquisition didn't contribute to results because its completion fell at the end of the reporting period, but Aberdeen estimated that pretax profit would have increased by GBP48.0 million if it had been included.
Aberdeen reported a GBP8.8 billion net outflow over the six months. Assets under management increased to GBP324.5 billion from GBP200.4 billion over the period, boosted by GBP134.1 billion due to the acquisition of SWIP, without which Aberdeen would have reported a fall to GBP190.4 billion.
Chairman Roger Cornick said inflows were subdued for the first five months, although there was some improvement during March.
"Against the backdrop of weak investor sentiment, we encountered net outflows from our main equity products, but we enjoyed healthy net inflows to our property, emerging market debt and high yield bond products," Cornick said in a statement.
"Investment performance across our fixed income strategies is generally ahead of the relevant benchmarks for both short and longer term time periods and our property performance remains robust," Cornick said.
"Performance of our key equity products has been running behind benchmark on a one year basis, but we have continued to focus on our bottom up, fundamental style of investing for the longer term in good quality companies at attractive valuations, and we have seen healthy outperformance in March and April," the chairman added.
Chief Executive Martin Gilbert, who co-founded the asset manager established in 1983, said Aberdeen's numbers were "resilient" in light of a difficult time for emerging markets.
"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," Gilbert said in a statement.
Aberdeen shares were Tuesday quoted at 425.60 pence, down 4.5%, making it the biggest faller on the FTSE 100.
By Samuel Agini; [email protected]; @samuelagini
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