Standard Life Aberdeen’s underlying profit dropped 10 per cent in 2019 as investors continued to withdraw their cash from its funds, hurting revenue.
Fee-based revenue fell 13 per cent to £1.63bn after net outflows in 2018 and 2019.
And adjusted profit before tax dropped 10 per cent year on year to £584m as a result of the withdrawals.
Assets under management (AUM) slipped 1.3 per cent to £544.6bn. Outflows jumped from £40.6bn in 2018 to £58.4bn, to offset an £11bn rise in inflows to £86.2bn. However, factoriing out £41bn of Lloyds withdrawals, AUM actually rose six per cent.
However, Standard Life Aberdeen recovered from a huge £787m loss in 2018 to post a £243m statutory profit for 2019.
Adjusted earnings per share climbed eight per cent to 19.3p. And the City giant kept its total 2019 dividend flat at 21.6p per share, including a flat 14.3p final dividend.
Why it’s interesting
The Edinburgh-based fund manager said net outflows slowed to £17.4bn apart from a £41bn tranche of withdrawals from Lloyds Banking Group. SLA called it a “significant improvement” on the £40.9bn of outflows it suffered in 2018.
But the outflows “continued reflecting investor sentiment towards emerging markets and equity markets more generally”, SLA said.
It also said coronavirus could threaten its balance sheet, but added: “Given the inherent uncertainties, it is not practicable at this time to determine the impact of Covid-19 on the group.”
“The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of Covid-19,” Standard Life Aberdeen also said.
What Standard Life Aberdeen said
Chief executive Keith Skeoch said:
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.
Our strong financial position, capital generation potential and focus on operational efficiency enables us to invest in the business to drive profitable revenue growth and shareholder return.
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.