Standard Life beats first-half profit forecasts
Standard Life posted much better than expected bottom line growth amid a slight increase in the volume of assets under management and a moderate increase in its fee income.
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However, ahead of its upcoming merger with Aberdeen it posted a £5.6bn outflow from its flagship Global Absolute Return Strategies multi-asset fund, underscoring the logic behind the merger as both outfits try to offset competition from passive investment vehicles.
Over the six months ending in June, assets under administration were up by 1% to £361.9bn (Numis: £362bn), driving a 6% jump in profits before tax to £362bn (UBS: £347bn).
Gross inflows were resilient, the company said in a statement, slipping from £21.8bn in the year-ago period to £20.7bn. However, a rise in redemptions from £20.9bn to £24.4bn meant the asset manager was left facing net outflows of £3.7bn.
Fee-based revenues grew 5% to £836m while the cost-to-income ratio was steady at 62%.
Following its 14 August merger with Aberdeen, the asset manager said it was ready to accelerate its transformation into a diversified world-class investment company.
"With the proposed merger with Aberdeen on track for completion on 14 August we are ready to accelerate the pace of strategic delivery as we open the next chapter of our transformation to a diversified world-class investment company. The combined leadership team of Standard Life and Aberdeen has been working well together to ensure "Day 1" readiness. We are well placed to continue to meet changing client and customer needs globally, and to generate growing and sustainable returns for our shareholders," said company chief Keith Skeoch.
The interim dividend was raised by 8.2% to 7.0p (Numis: 7.1p)
Commenting on the outlook for Standard Life ahead of its results, analysts at Numis told clients: "Whilst we are positive on the medium to long term outlook for the group and regard the shares as relatively inexpensive, we see the next 6-12 months as a period of transition as the strategy develops and structures, leadership and teams are aligned."
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