Standard Aberdeen assets slip; shares up on buyback

Edinburgh-based asset management giant Standard Life Aberdeen (SLA) said on Tuesday its assets under management and administration slipped to £610.1 billion in the first half of 2018 from £627 billion a year earlier and adjusted profit before tax fell to £478 million from £521 million.

However, shares of Standard Life Aberdeen rose almost 6% as it said it will accelerate its share buyback programme, with an initial tranche of £175 million to commence in the next few days, as part of a capital return plan of up to £1.75 billion.

SLA co-CEO Martin Gilbert told a media call: “The stock is very undervalued and it makes a lot of sense for us to accelerate that because it’s beneficial to our shareholders.”

The accelerated buyback was described as the main “bright spot” of the half year results by Bernstein analysts, who reiterated their “outperform” rating on the stock.

Standard Life Aberdeen stock rose 5.64% to around 324p to give the firm a current stock market value of about £9.4 billion, according to Bloomberg data.

Adjusted profit before tax from continuing operations for the six months ending June 30 fell to £311 million from £355 million a year earlier.

Total net outflows for the group were £16.6 billion.

Assets under management and administration at the group’s Aberdeen Standard Investments business slipped to £557.1 billion from £575.7 billion on January 1.

Gilbert and co-CEO Keith Skeoch said in a joint statement: “Conditions for the asset management industry continue to be challenging.

“However, our gross inflows remain robust and are spread across a diverse range of investment capabilities, and our market-leading adviser platforms continue to grow.

“Our investment and distribution teams are winning new mandates and we have a good and diverse pipeline of business from around the world.

“We are actively taking steps to improve our investment performance in key areas and are encouraged by the impact of these initiatives.

“We are also pleased by progress on the integration programme and achievement of cost synergies.

“The sale of our UK and European insurance operations will complete our transformation to a capital light business and enhances our strategic partnership with Phoenix.

“Our financial strength allows us to return up to £1.75 billion of capital to shareholders and we will commence the first tranche of £175 million in the next few days.

“We will still have one of the strongest balance sheets in the sector, which enables us to continue to develop and broaden our areas of strength and focus on delivering long-term performance for our clients.”