Shares in asset management behemoth Standard Life Aberdeen (SLA) gained 1% to 266p as it kept its dividend and maintained plans to complete its share buyback programme.
It came after the firm posted a 30% fall in adjusted pre-tax profits in the first half of the year to £195 million.
The firm pinned the fall on a 13% drop in fee-based first half revenues to £706 million due to outflows last year, client preferences for different assets during the pandemic, and the transfer of a large investment mandate.
INCOME SEEKERS PLEASED
Thanks to its strong balance sheet, which boasts surplus regulatory capital of £1.8 billion as well as £3 billion of listed investments which aren’t included as regulatory capital, the firm maintained its interim dividend at 7.3p per share, pleasing income seekers.
SLA said it is ‘committed’ to delivering a dividend that is ‘sustainable over the medium term’, adding that ‘at this point in time, our operating performance together with the strength and quality of our balance sheet’ have enabled it to maintain the interim payout.
It means the firm is one of just a handful of FTSE 100 companies to have kept their payout to shareholders.
The company also plans to complete its existing £400 million share buyback programme, which is 55% complete, during the second half of the year.
ASSETS FALL BUT COSTS STABLE
It comes as assets under management and administration (AUMA) at the end of June fell 6% to £511.8 billion after banking group Lloyds (LLOY) withdrew £24.9 billion and handed it to rival Schroders (SDR), making it the largest stand-alone asset manager with £525.8 billion of AUMA.
Leaving aside the Lloyds withdrawal, redemptions of £38.1 billion in the first half were 27% lower than the previous year and almost perfectly matched by inflows of £38.2 billion, a 5% increase on the previous year.
However, the firm noted a clear reduction in risk appetite due to the rise in market volatility with customers reallocating funds to lower risk assets which generated lower fees.
Analyst Julian Roberts at Jefferies flagged the firm’s better performance on costs, which were some 5% lower than expectations meaning pre-tax profits were a similar amount above expectations.
The firm’s investment performance also improved, with 68% of managed assets outperforming their respective benchmarks over three years compared with 60% outperforming at the same stage last year.
Outgoing chief executive Keith Skeoch (pictured), who is leaving this year after more than two decades with the business, said the firm had ‘strong foundations, an enviable capital position, talented people, enduring relationships and big ambitions.’