(Alliance News) - Standard Life Aberdeen PLC on Tuesday reported a slip in assets under management over 2019 - with a reduction in all four fund classes - but the company was able to keep its payout steady.
Standard Life declared an unchanged total annual dividend of 21.6 pence, having promised a year ago to maintain its dividend level through its restructuring.
The wealth manager recorded assets under management and administration of GBP544.6 billion at December 31, down 1.3% from the GBP551.5 billion seen at the end of 2018. Despite the drop, the result beat the market consensus forecast of GBP529.1 billion in assets.
SLA recorded net outflows of GBP58.4 billion in 2019, which also outperformed the market expectation of GBP72.7 billion. The wealth manager was keen to point out that, excluding the outflows from losing the Scottish Widows mandate from Lloyds Banking Group PLC, net outflows totalled only GBP17.4 billion.
"We have seen growing momentum in the second half of the year across the business with improved investment performance and flows. We remain on track to deliver targeted synergies and have identified more we can deliver as we continue to reshape the business and sustain resilience," Chief Executive Keith Skeoch said.
All four of SLA's major fund classes - Institutional, Wholesale, Strategic Insurance Partners, and Platforms & Wealth - saw assets under management decrease over 2019.
SLA noted its gross inflows increased by 15% in 2019 to GBP86.2 billion.
"Institutional gross inflows improved significantly in 2019 with a higher level of inflows in Quantitative, Fixed income and Alternatives, which benefited from a win of GBP5.5 billion in the fourth quarter of a lower margin US advisory mandate. Wholesale gross inflows increased," SLA explained.
"Net outflows continued reflecting investor sentiment towards emerging markets and equity markets more generally, as well as weaker 2018 investment performance in both Equities and Multi-asset. However, net outflows for Institutional and Wholesale significantly reduced due to lower redemptions in Equities and Multi-asset, strong Cash/Liquidity flows and the higher gross inflows described above," it said.
Market and other movements added GBP49.0 billion to total assets.
For 2019, fee based revenue was down 13% to GBP1.63 billion from GBP1.87 billion in 2018 and adjusted pretax profit - a key profit measure for the company - fell by 10% to GBP584 million from GBP650 million - both figures coming in below market consensus.
Market consensus predicted fee-based revenue at GBP1.61 billion and adjusted pretax profit at GBP565 million.
Pretax profit was GBP243 million versus a loss of GBP787 million in 2018, as total income rose 87% year on year to GBP3.99 billion from GBP2.13 billion.
Looking ahead, Skeoch warned of the "turbulence" expected from the deadly outbreak of the coronavirus.
He said: "The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of COVID-19. Importantly we are focused on what we can control, namely delivering for our clients, customers, colleagues and shareholders; diversifying our revenues; investing for the future and maintaining financial discipline."
Skeoch said the company is focused on what it can control and believes the wealth manager is well positioned to manage the uncertainty.
Shares in Standard Life Aberdeen were 1.0% higher in London on Tuesday morning at 241.90 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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