13th Mar 2019 08:28
LONDON (Alliance News) - Standard Life Aberdeen PLC restructured its management team Wednesday as the fund manager continues to progress its merger, but it saw a drop in assets under management and administration in 2018.
The investment firm is set to end its co-chief executive structure, which was formed as a result of the merger between Standard Life PLC and Aberdeen Asset Management PLC.
Keith Skeoch, former head of Standard Life, will become the sole chief executive officer with his co-CEO Martin Gilbert, founder and former head of Aberdeen, to take up the role of vice chair.
Meanwhile, Chief Financial Officer Bill Rattray is to step down from Standard Life at the end of May, to be replaced by Stephanie Bruce. Bruce has been a partner at accountant PricewaterhouseCoopers since 2002, Standard Life said.
Standard Life proposed a final dividend of 14.3p per share, bringing its total for the year to 21.6p, up 1.4% on 2017. The company intends to maintain its 2018 dividend during "the period of transformation", which the company said is 75% complete.
The fund manager recorded assets under management and administration from continuing operations of GBP551.5 billion as at December 31, down 9.3% from GBP608.1 billion at the end of 2017.
"In a tough year of continued change for our industry, we saw further net outflows - equivalent to about 7% of our starting assets. Yet as we have shown by our increased gross inflows, we continue to develop a business that has the scale and breadth to compete globally - and to continue to get closer to British savers through our growing Platforms," said new Vice Chair Gilbert.
Analyst consensus forecasted Standard Life Aberdeen to end 2018 with GBP555.8 billion assets under management and administration, with net outflows forecast at GBP40.3 billion.
Net fund outflows from continuing operations totalled GBP40.9 billion versus GBP32.9 billion outflows recorded in 2017. Market movements were a net GBP20.5 billion loss in 2018 with the same movements adding GBP36.8 billion to assets in 2017.
Standard Life Aberdeen attributed the fall in total assets to the negative market movements - especially in the second half - and noted investor sentiment falling across the industry resulting in the increased net outflows.
The company also noted the "challenging" net flows from Aberdeen Standard Investments but was encouraged the outflows were concentrated in a "narrow range of strategies".
Assets managed by Aberdeen Standard Investments decreased by 10% to GBP505.1 billion from GBP562.1 billion the previous year.
Adjusted pretax profit from continuing operations - a key profit measure for the company - for 2018 totalled GBP650 million, down 1.5% from the GBP660 million recorded in 2017. It was, however, better than the consensus forecast of GBP617 million.
The drop was attributed to lower fee-based revenue, which reduced by 11% to GBP1.87 billion, but was offset by a reduction in operating expenses, decreasing 9.7% to GBP1.40 billion, and the profit from its share of its pension and protection business, Standard Life Assurance, which Standard Life Aberdeen sold to FTSE 250-listed Phoenix Group.
Pretax profit for 2018 was GBP868 million, up 19% from GBP732 million in 2017, on a total income of GBP2.13 billion and GBP2.17 million, respectively. The rise was attributed to the inclusion of profit from Aberdeen Asset Management.
Shares in Standard Life Aberdeen were up 3.0% in early trading Wednesday at 252.40 pence each.
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