DEEN Asset Management’s full-year results today came in ahead of analyst forecasts as debt fell, profits rose and operating margins improved.
Profit before tax soared 147 per cent to £210m in the year to 30 September, from £85.1m in 2009, while assets under management rose 22 per cent to £178.7bn from £146.2bn the previous year.
Operating margin rose to 35 per cent while debt was cut to £7.7m, with gearing reduced from 17.1 per cent in 2009 to 0.6 per cent.
Chief executive Martin Gilbert said the year had been “excellent” and the firm was now prioritising further organic growth.
“I am particularly pleased that we have achieved this whilst strengthening our balance sheet still further, with the result that the business will move into a net cash position shortly,” Gilbert said.
The firm brought in £46.6bn of new business, up 144 per cent from £19.1bn the previous year, while outflows slowed, and were primarily out of its low-margin funds.
It recorded £44bn outflows over the year, generating a net inflow of £2.6bn.
The firm increased its full-year dividend to 7p per share.
Management fees increased 48 per cent on the previous year, to £596.5m, while performance fees rose 212 per cent to £30.3m year-on-year.
Execution Noble analyst Sri Karthik said profit before tax and earnings per share both beat his estimate by eight per cent.
“Today’s results were ahead of our and consensus forecast on the back of higher than expected performance and transaction fees,” he said.
Numis analyst David McCann said while the strong cash position had enabled the firm to raise the dividend, he saw weakness in organic flows and felt Aberdeen’s stock was now fairly valued.
“Assuming good recent fixed income performance continues it will still likely take another circa 12 months to restore the all important three year track record, so much improved flows are unlikely until at least then,” he said.
Gilbert said financial markets still posed many challenges and uncertainties but the company remained confident that its diversification would position it well.