5th May 2015 07:25
LONDON (Alliance News) - Aberdeen Asset Management PLC Tuesday said it is returning surplus capital to shareholders as net outflows in the first half of its financial year were "cushioned" by rallying markets.
In a statement, the asset manager and FTSE 100 constituent said assets under management grew to GBP330.6 billion from GBP324.4 billion between September 30, 2014 and March 31, 2015.
Net outflows amounted to GBP11.30 billion over the six months, with GBP6.50 billion of that amount coming in the second quarter. Market movement and performance more than offset the net outflows, adding GBP13.5 billion to assets under management. Positive currency fluctuations amounted to GBP4.0 billion.
The potential for global economic and political uncertainty means that operating conditions are expected to remain challenging in the short term, according to Aberdeen Chairman Roger Cornick, who thinks the group is in a better place to adapt over the long term due to a drive to diversify.
"Gross new business inflows have continued to grow. However, headline outflows are disappointing arising from a combination of asset allocation decisions amidst continued weak investor sentiment towards emerging markets and some expected structural outflows from certain institutional clients," Cornick said in a statement.
Weak investor sentiment to emerging markets has hit Aberdeen as markets prepare for the US Federal Reserve to lift interest rates from their historic lows. Aberdeen completed the GBP550 million acquisition of Scottish Widows Investment Partnership from Lloyds Banking Group PLC in 2014, as it looked to diversify and increase its assets under management.
The group said it intends to launch a share buyback of up to GBP100 million to return surplus capital to shareholders. It will conduct the programme over the remainder of the year. It increased its interim dividend to 7.5 pence per share from 6.75 pence per share. Aberdeen had raised the prospect of a share buyback in December last year, as cost synergies on the acquisition of SWIP ran ahead of expectations.
Aberdeen said its capital position stood at GBP541 million at the end of March representing "headroom" of GBP221 million over its regulatory capital requirements at the end of that month.
First-half pretax profit increased to GBP185.4 million from GBP168.7 million, as net revenue increased by 21% to GBP605.2 million and operating expenses increased to GBP416.2 million from GBP335.2 million.
Aberdeen said its operating margin, a key measure of profitability, increased to 44.7% from 43.9% over the course of the first half. It measures operating profit before the costs relating to amortisation of intangible assets and acquisitions as a percentage of net revenue.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
ADN.L