3rd May 2016 06:40
LONDON (Alliance News) - Aberdeen Asset Management PLC on Tuesday said first-half pretax profit almost halved amid fragile investor sentiment towards emerging markets, although the "strength" of the FTSE 250 money manager's balance sheet allowed for investments such as bolt-on acquisitions.
Pretax profit fell to GBP98.8 million in the six months ended March 31, Aberdeen said in a statement, from GBP185.4 million in the corresponding half a year earlier. Aberdeen's interim dividend of 7.5 pence per share was unchanged.
Underlying profit, stated before amortisation of intangible assets and acquisition-related items, fell to GBP162.9 million from GBP270.2 million.
"These results reflect the challenging conditions Aberdeen has faced during the past three years, in particular the weakness in emerging markets," Chief Executive Martin Gilbert said in a statement.
Aberdeen Chairman Roger Cornick said the cyclical slowdown in emerging markets was exacerbated by lower oil and commodity prices. Even though Aberdeen's equity portfolios performed strongly against their benchmarks in the first four months of 2016, Cornick said "this does not mean a dramatic improvement in new business flows is anticipated in the short term".
Assets under management amounted to GBP292.8 billion as of March 31, up from GBP283.7 billion six months earlier, with boosts from market movements and investment performance of GBP10.1 billion, foreign currency of GBP7.9 billion, and corporate transactions of GBP7.8 billion, more than offsetting net outflows of client money of GBP16.7 billion.
During the half, Aberdeen completed the acquisitions of hedge-fund manager Arden, risk-graded portfolio provider Parmenion, and fund-of-funds investment manager Advance, adding GBP9.5 billion of new assets, offset by the disposal of GBP1.7 billion of low-margin property management assets.
"Gross new business inflows have continued at healthy levels, while outflows have moderated slightly. However, we remain vulnerable to further outflows over the next few quarters as clients continue to react to the difficult conditions for performance over the last few years," Cornick said.
"To some extent, these flows have been cushioned by the recent rally in markets and the net addition of assets from transactions completed in the period," the chairman said.
By Samuel Agini; [email protected]; @samuelagini
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