Standard Life Aberdeen (SLA) singling out “an improvement in the rate of net outflows” among institutional and wholesale clients as a highlight of its 2019 results tells you a lot about the trouble facing the asset manager in recent times.
In the second half of the year, the group suffered £6bn in net outflows, although that was a sizeable improvement on the £15.5bn of client money that left the business in the prior six months, or the £39.8bn which pulled during 2018. Yet look to the wider group – including the loss of the Lloyds Banking mandate – and net outflows swelled to £58.4bn in 2019.
Although a decent investment performance partly offset those losses, the period ended with a reduction in assets under management and administration of 1.3 per cent. Together with a shift in the asset mix, that explained the fall in fee-based revenue and the rise in the cost-to-income ratio from 68 to 71 per cent.
Scars have now been left on the balance sheet. Noting a combination of net outflows, weaker market conditions and “competitive pricing on future revenue projections”, management has made a £1.57bn impairment of the intangible assets.
Consensus forecasts are for earnings per share of 18.6p in 2020, rising to 20.3p in 2021.
STANDARD LIFE ABERDEEN (SLA) | ||||
ORD PRICE: | 250p | MARKET VALUE: | £5.81bn | |
TOUCH: | 250-250.4p | 12-MONTH HIGH: | 338p | LOW: 209p |
DIVIDEND YIELD: | 8.6% | PE RATIO: | 28 | |
NET ASSET VALUE: | 283p* | NET CASH: | £1.35bn |
Year to 31 Dec | Total income (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2016^ | 18.7 | 789 | 18.7 | 19.8 |
2017^ | 17.0 | 964 | 29.8 | 21.3 |
2018 | 2.13 | -787 | -29.3 | 21.6 |
2019 | 3.99 | 243 | 8.9 | 21.6 |
% change | +87 | - | - | - |
Ex-div: | 2 Apr | |||
Payment: | 19 May | |||
*Includes intangible assets of £1.7bn, or 73.6p a share. ^Insurance accounting pre-merger. |