Aberdeen Asset Management’s profits have gone south, as investor battles with emerging markets
Profits for Aberdeen Asset Management have almost halved, it revealed in its half-year results today.
Shares in the company were trading down 7.7 per cent at 275.7p shortly before 9:30am London time.
The figures
The investment manager reported profits before tax of £98.8m for its six-months ended March 2016, down 46.7 per cent from £185.4m the year before.
Underlying profits before tax, which do not take into account amortisation or acquisition-related items, fell to £162.9m, down 40 per cent from £270.2m last year.
Net revenue for the company did not fare much better, dropping to £483.6m, down 20 per cent from the prior year's £605.2m, while assets under management at the period end fell to £292.8bn from £330.6bn.
Why it's interesting
Some will have been looking to Aberdeen's results today to gauge the conditions in the emerging markets, where the investor has focused its business over the last few years. It's not exactly news that these markets have been tough as of late, but today's results give some indication as to just how tough it actually is out there.
What Aberdeen Asset Management said
"These results reflect the challenging conditions Aberdeen has faced during the past three years, in particular the weakness in emerging markets," said Martin Gilbert, chief executive. "However our balance sheet strength has allowed us to continue to invest in the business, including the completion of a number of bolt-on acquisitions which have added new capabilities and new client channels."
Meanwhile, chairman Roger Cornick added in his statement: "Much of the period to 31 March 2016 was played out against a backdrop of ongoing fragile investor sentiment towards emerging markets, with this cyclical slowdown exacerbated by the effects of falling oil and commodity prices."
What analysts said
Analysts at Liberum remarked that the company was showing some signs of improvement in this set of results, with adjusted profits before tax proving better than forecast.