(Correcting the net outflows from Standard Life Aberdeen's funds in the first half of 2018.)
(Alliance News) - Standard Life Aberdeen PLC on Wednesday reported a rise in assets under management & administration at the end of the first half as the fund manager's net outflows narrowed and investment performance improved.
The asset manager declared an unchanged interim dividend of 7.3p.
The fund manager recorded assets under management & administration from continuing operations of GBP577.5 billion at June 30, up 4.7% from GBP551.5 billion six months earlier.
"Encouragingly this was helped by an improvement in the investment performance of key strategies with reduced net outflows from Absolute Return compared to the second half of 2018. However, despite this improvement in investment performance, demand for equities remains low across the wider market and we continued to see elevated equity net outflows," said Standard Life," the fund manager said.
Net fund outflows totalled GBP15.9 billion versus GBP16.9 billion outflows a year before and GBP24.0 billion outflows recorded in the second half of 2018. The majority of the outflows in the first half of 2019 were seen in Standard Life Aberdeen's Equities strategies, which saw GBP13.6 billion in redemptions leading to net outflows of GBP9.3 billion.
Market movements added GBP41.2 billion to the company's total funds, with the same movements contributing a GBP16.6 billion loss the year before.
Chief Executive Keith Skeoch said: "We have made good progress in reshaping our business so that it is set up to take advantage of the trends impacting our industry both globally and in the UK. We are encouraged by an improvement in our investment performance and a growing number of strategies with positive ratings from investment consultants. We are seeing inflows that are more diverse and are pleased to have retained GBP35 billion of Lloyds Banking Group assets."
In February 2018, Lloyds Banking Group PLC terminated its investment manager contract over the management of Scottish Widows' assets with Standard Life Aberdeen, citing "competition concerns". Those concerns arose from Standard Life merging with Aberdeen Asset Management in August 2017.
Lloyds has hired FTSE 100-wealth manager Schroders PLC to manage a portion Scottish Widows' assets, which totalled about GBP104 billion as of June 30.
However, Standard Life Aberdeen and Lloyds agreed that Standard Life Aberdeen will manage about a third of Scottish Widows' total assets under management, which comes to about GBP35 billion, until at least April 2022 - when the original investment management contract ends.
Total income from continuing operations for the first half of the year came in at GBP1.68 billion, up 56% from GBP1.08 billion a year ago, with pretax profit shooting up to GBP629 million from GBP127 million.
Adjusted pretax profit from continuing operations - a key profit measure for the company - was down 10% in the first half to GBP280 million from GBP311 million the year before. The decline was attributed to a 16% fall in fee-based revenue to GBP815 million.
Looking ahead, Standard Life said that the current environment for asset management is tough as macroeconomic and political uncertainty persists. However, the company said its strong balance sheet and cost controls should allow it to invest for growth and generate sustainable dividends.
Skeoch added: "We are also building for the future, with our business in China securing a license to develop a pensions business and our financial advisory business 1825 announcing two acquisitions that will significantly increase its assets, number of advisers and national reach. With a strong balance sheet, our drive for efficiency and ability to invest in innovation, technology and our people, we are well placed to deliver value and sustainable returns for our shareholders."
Shares in Standard Life Aberdeen were 5.9% lower in London in midday trading on Wednesday at 265.20 pence each.
Lloyds (LLOY)
Schroders (SDR)
