According to economic theory, the negative or miniscule yields on developed world government debt would send bond investors scuttling towards emerging markets to secure a return. Unfortunately for emerging markets specialist Aberdeen Asset Management (ADN), investors have been doing just the opposite. In what chief executive Martin Gilbert described as a "pretty torrid time", the asset manager lost a net £11.3bn funds under management over the period as investors moved money away from emerging markets and global strategies.
Ignore these outflows and the business is growing stronger by the day. New business inflows were £23.4bn for the six months to the end of March - 15 per cent up on the previous half year and 64 per cent up year on year. Underlying pre-tax profit, which strips out amortisation and acquisition-related items, was up by a quarter, and operating cash flow increased. Alongside the double-digit dividend increase, the company announced a £100m share buyback plan to return part of its huge cash pile to investors.
Assets under management finished the period up 2 per cent at £330.6bn, as currency movements and investment performance papered over the crack left by the net outflows. Analysts at Peel Hunt are expecting full-year pre-tax profits of £563m and EPS of 33.7p, up from £490m and 31.1p in 2014.
| ABERDEEN ASSET MANAGEMENT (ADN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 451p | MARKET VALUE: | £6bn | |
| TOUCH: | 450.5-450.9p | 12-MONTH HIGH: | 509.5p | LOW: 383.4p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 128p* | NET CASH: | £567m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 593 | 169 | 11.0 | 6.75 |
| 2015 | 683 | 185 | 10.9 | 7.50 |
| % change | +15 | +10 | 0 | +11 |
Ex-div: 14 May Payment: 18 Jun *Includes intangible assets of £1.5bn, or 112p a share | ||||
