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Aberdeen Asset Mngmt (ADN)

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Monday 29 April, 2013

Aberdeen Asset Mngmt

Half Yearly Report

RNS Number : 4239D
Aberdeen Asset Management PLC
29 April 2013
 



ABERDEEN ASSET MANAGEMENT PLC

Interim Results for six months to 31 March 2013

HIGHLIGHTS

 

·    Revenue £516.0 million (+25%)

·    Underlying profit before tax £222.8 million (+37%)

·    Underlying earnings per share 14.9p (+43%)

·    Dividend per share 6.0p (+36%)

·    Operating margin 43.8% (1H 2012: 40.1%)

·    Average fee margin 49.0bps (1H 2012: 43.9bps)

·    AuM £212.3 billion (+13% on 30 September 2012)

 

FINANCIAL HIGHLIGHTS


March 2013

March 2012

Revenue

£516.0m

£413.1m

Pre-tax profit



Before amortisation of intangibles

£222.8m

£162.2m

After amortisation of intangibles

£188.2m

£124.3m

Diluted earnings per share



Before amortisation of intangibles

14.88p

10.43p

After amortisation of intangibles

12.43p

7.95p

Dividend per share

6.0p

4.4p

Operating cashflow

£247.7m

£164.6m

Gross new business

£24.6bn

£18.2bn

Net new business

+£4.4bn

-£0.4bn

Assets under management at period end

£212.3bn

£184.7bn

 

Martin Gilbert, Chief Executive of Aberdeen Asset Management, commented:

 

"It has been a strong first half to the year with investors' appetite for risk assets returning. As a result we have seen healthy net new business flows which, combined with performance by global markets, has generated strong growth in our revenue and in profit margins. We remain cautious on the market outlook but believe our fundamental approach to investing will continue to serve our clients' long term needs.

 

Management will host a presentation for analysts and institutions today at 10:00 (UK) to be held at the offices of Aberdeen Asset Management, Bow Bells House, 1 Bread Street, London EC4M 9HH. The event will also be available to view via a live webconference. To register please use the following weblink:

 

http://www.media-server.com/m/p/bmdevft6 

 

For more information:

 

Aberdeen Asset Management

Martin Gilbert              Chief Executive             + 44 (0) 207 463 6000

Bill Rattray                   Finance Director           + 44 (0) 207 463 6000

 

Maitland

Neil Bennett                                                     + 44 (0) 207 379 5151
Tom Eckersley                                                 + 44 (0) 207 379 5151

Chairman's statement

The strategic direction of the Group over the last several years created a platform for further progress during the six month period to 31 March 2013. Healthy new business flows during the first half of the current financial year are reflected in strong growth in revenues and profit margins as investor appetite for risk has improved.

 

Assets under management increased to £212.3 billion as at 31 March, a result of both the positive market and currency performance and net new business flows. Strong demand for our key products reflects our long term investment philosophy and process which has, once again, enabled the Group generally to outperform relevant benchmarks.

 

We announced two small infill transactions in February which will boost our AuM in the second half year - Artio Global Investors, which currently has AuM of approximately $11.5 billion (£7.5 billion), principally in US retail fixed income funds; and a 50.1% interest in SVG Advisers, which has approximately £4 billion in funds of private equity. Each of these deals will bring additional expertise which will complement our own capabilities and we believe they will benefit our efforts to diversify new business flows.

 

We also took the opportunity to refinance the capital securities which form an element of our equity, completing a $500 million issue of 7.0% perpetual cumulative capital notes on 1 March. We will apply $400 million of the proceeds in repaying our existing 7.9% perpetual capital securities at the end of May. The new securities will form part of the Group's regulatory capital.

 

Financials

Profit before taxation for the period was £188.2 million (2012: £124.3 million).  Underlying profit, stated before amortisation of intangible assets, was £222.8 million, compared to £162.2 million in 2012.  This represents underlying earnings per share, on a diluted basis of 14.88p (2012:10.43p).

 

The Board has decided to pay an interim dividend of 6.0 pence per share, an increase of 36% on the 2012 interim payment. This increase is consistent with our objective of paying a progressive level of dividend each year. The interim dividend will be paid on 13 June 2013 to shareholders on the register at 10 May 2013.

 

Net revenue for the period increased by 25% to £516.0 million (2012: £413.1 million).  Recurring fee income improved by 24% to £492.5 million (2012: £395.7 million) and was supplemented by £23.5 million of performance fees (2012: £17.4 million).  The blended average management fee rate increased to 49.0 basis points (year to September 2012: 45.1bps), benefiting from the inflows of new business to higher margin asset classes and pooled funds.

                                                                       

The Group's operating margin for the period increased to 43.8%, continuing the steady growth achieved in recent years and strongly ahead of the 40.6% reported for the full year to September 2012.

 

We generated £247.7 million of operating cashflow (2012: £164.6 million), as we again converted operating profit efficiently into cash. We spent £123.8 million to purchase shares for the deferred bonus scheme, which completes the programme undertaken over the last three years to make market purchases of sufficient shares to fully match all outstanding deferred share awards, and we also invested additional seed capital to facilitate the launch of several new products.

 

The balance sheet was strengthened further during the period, with all remaining convertible bond holders electing to convert their holdings to ordinary shares and, as I have already mentioned, we have now refinanced our capital securities on more favourable terms. Taken together with our strong results for the period, we achieved our objective of eliminating reliance on the regulatory capital waiver.

 

We remain focused on generating profitable growth and cashflow. We expect our strong balance sheet position and ongoing cash generation to provide us with surplus capital over time. I have already reiterated the Board's objective of growing the dividend progressively. Thereafter, we will look to distribute available surplus capital to shareholders, after taking into account a comfortable level of headroom over our required regulatory capital and after investing in the development of our business, over time. Share buybacks will be considered provided they are earnings enhancing and in the interests of shareholders generally.

 

Review of operations

Assets under management have increased by 13% to £212.3 billion, compared to the value at the end of our last financial year and pooled funds now represent 48.1% of total AuM (30 September 2012: 45.1%). The growth in AuM is analysed by asset class in the following table.

 


 

Equities

£bn

Fixed income

£bn

Aberdeen solutions

£bn

 

Property

£bn

Money market

£bn

 

Total

£bn

AuM at 30 September 2012

100.7

36.3

23.6

18.7

7.9

187.2

Net new business flows for the period

7.8

(1.4)

(1.1)

(0.4)

(0.5)

4.4

Market appreciation & performance

10.5

0.6

1.4

(0.6)

-

11.9

Exchange movements

5.3

1.9

0.5

0.8

0.3

8.8

AuM at 31 March 2013

124.3

37.4

24.4

18.5

7.7

212.3

 

Gross new business inflows for the period totaled £24.6 billion (2012: £18.2 billion) whilst outflows amounted to £20.2 billion (2012: £18.6 billion), resulting in a net inflow for the six month period of £4.4 billion (2012: net outflow £0.4 billion).

 

The majority of the inflows were again into our main equity products - global emerging markets ("GEM"), Asia Pacific and global equities - but it is encouraging to note that emerging market debt has also contributed very healthy inflows during the period.

 

As I have reported before, we have for some time been seeking to moderate the rate of inflows to our GEM funds so that the quality of the product is not compromised. We implemented a further step from early March by closing our US-domiciled GEM mutual funds to new investors and introducing an initial charge, for the benefit of existing investors, on any new investment into our UK and Luxembourg funds. In the short period since implementation we have seen a moderate level of net outflows, but the early signs are that it will have the desired effect of reducing inflows to more sustainable levels.

 

Within the total flows reported for Asia Pacific equities, we have seen continued appetite for our broader Asia Pacific including Japan funds, as well as for funds investing in single countries, such as Japan and China. Inflows to our emerging market debt funds have increased considerably, with net inflows of £1.4 billion during the period (2012: £0.3 billion). As a consequence, our EMD strategy now has assets of £7.5 billion, a 60% increase over the last year.

 

Investment performance has been strong across many of our strategies, including several of our less recognised products, such as European and Japanese equities, global fixed income and fund of hedge funds.

 

Our property team has seen some success during the period, having been awarded new mandates for £0.3 billion of AuM which is expected to be received during the second half of the financial year, and sees continued investor interest in our capability. Within Solutions, flows during the period remained mixed, with net inflows to multi-asset being outweighed by continuing outflows from multi-manager and funds of hedge funds as the business continues its transition. Our fund of funds business has seen some encouraging inflows after the end of the period, and we look forward to growing this element of our business with the addition of the SVG assets later this year.

 

We continue to focus our distribution efforts across Asia, the Americas and EMEA regions, with specific emphasis on expanding our network in a number of key markets such as the US, Switzerland and Germany.  We are particularly mindful of the need to promote our brand, particularly in regions where the Aberdeen name is less well known. We will therefore be launching a global brand campaign on 20 May to convey clearly what Aberdeen does and what we stand for. Through new advertising and a refreshed brand look, we will be communicating those qualities that define Aberdeen.

 

Outlook

The six month period under review has generally replicated conditions experienced in 2012, with positive market performance for much of the first half year followed by volatility during early April. We are consequently measured in our outlook but confident that our investment philosophy and process will remain well suited to the pursuit of further profitable growth on behalf of our investors, while our corporate planning and communications will enhance the appeal of Aberdeen to a wider global investment community.

 

Finally, following Giles Weaver's retirement from the Board following the AGM, as previously announced, I would like to take the opportunity to welcome Jutta af Rosenborg to the Board. Jutta was appointed in January, 2013 and has enjoyed a career as a European CFO with more recent non-executive experience in the pharmaceutical industry and international investment.

 

Roger Cornick

Chairman


Condensed consolidated income statement

For the six months to 31 March 2013



6 months to 31 March 2013

6 months to 31 March 2012

Year to 30 September 2012


Notes

Before

amortisation

£m

Amortisation

£m

Total

£m

Before

amortisation

£m

Amortisation

£m

Total

£m

Before

amortisation

£m

Amortisation

£m

Total

£m

Gross revenue


628.6

-

628.6

500.3

-

500.3

1,048.8

-

1,048.8

Commissions payable


(112.6)

-

(112.6)

(87.2)

-

(87.2)

(179.6)

-

(179.6)

Net revenue

3

516.0

-

516.0

413.1

-

413.1

869.2

-

869.2

Operating costs


(289.9)

-

(289.9)

(247.4)

-

(247.4)

(516.5)

-

(516.5)

Amortisation of intangible assets


-

(34.6)

(34.6)

-

(37.9)

(37.9)

-

(78.1)

(78.1)

Operating expenses


(289.9)

(34.6)

(324.5)

(247.4)

(37.9)

(285.3)

(516.5)

(78.1)

(594.6)

Operating profit


226.1

(34.6)

191.5

165.7

(37.9)

127.8

352.7

(78.1)

274.6

Net finance costs

5

(3.9)

-

(3.9)

(2.6)

-

(2.6)

(5.1)

-

(5.1)

Other gains and losses


0.6

-

0.6

(0.9)

-

(0.9)

0.2

-

0.2

Profit before taxation


222.8

(34.6)

188.2

162.2

(37.9)

124.3

347.8

(78.1)

269.7

Tax expense

6

(40.1)

5.2

(34.9)

(31.6)

8.1

(23.5)

(62.7)

16.6

(46.1)

Profit for the period


182.7

(29.4)

153.3

130.6

(29.8)

100.8

285.1

(61.5)

223.6

Attributable to:











Equity shareholders of the Company




145.7



93.6



208.7

Other equity holders




7.6



7.2



14.9





153.3



100.8



223.6

Earnings per share











Basic

8



12.81p



8.48p



18.88p

Diluted

8



12.43p



7.95p



17.55p

 

 


Condensed consolidated statement of comprehensive income

For the six months to 31 March 2013


 

6 mths to

31 March

2013

£m

 

6 mths to

31 March

2012

£m

 

Year to

30 September

2012

£m

Profit for the period

153.3

100.8

223.6

 

Items that will not be reclassified subsequently to profit or loss




Net actuarial gain on defined benefit pension schemes

-

-

0.6

Tax on net actuarial gain on defined benefit pension schemes

-

-

(1.3)


-

-

(0.7)

 

Items that may be reclassified subsequently to profit or loss




Translation of foreign currency net investments

31.1

(3.6)

(9.2)

Available for sale assets:




- gains (losses) during the period

0.2

(1.4)

(0.7)

- losses recycled from equity to the income statement

2.0

2.8

4.6

Tax on items that may be recycled to profit or loss

(0.8)

(0.8)

(2.1)


32.5

(3.0)

(7.4)

 

Other comprehensive income (expense), net of tax

 

32.5

 

(3.0)

 

(8.1)

 

Total comprehensive income for the period

 

185.8

 

97.8

 

215.5

 

Attributable to: 




Equity shareholders of the Company

178.2

90.6

200.6

Other equity holders

7.6

7.2

14.9

 

 

Condensed consolidated balance sheet

31 March 2013


 

 

Notes

 

31 March

2012

£m

 

30 September

2012

£m

Assets




Non-current assets




Intangible assets

9

1,031.7

994.1

Property, plant and equipment


19.5

19.1

Other investments

10

38.9

53.1

Deferred tax assets


23.0

15.9

Pension surplus

16

5.4

12.9

Trade and other receivables


3.9

4.2

3.6

Total non-current assets


1,079.6

1,122.7

1,098.7

Current assets





Stock of shares in managed funds


0.3

0.2

Assets backing investment contract liabilities

11

1,388.5

2311.9

Trade and other receivables


290.2

254.2

Other investments

10

62.8

58.5

Cash and cash equivalents


208.6

347.9

Total current assets


3,760.8

1,950.4

2,972.7

Total assets


4,840.4

3,073.1

4,071.4

Equity





Called up share capital

12

114.9

115.1

Share premium account


812.2

815.9

Other reserves


213.8

209.0

Retained loss


(85.1)

(134.6)

(51.6)

Total equity attributable to shareholders of the parent


 

1,168.2

 

1,006.3

 

1,088.4

Non controlling interest


12.8

14.0

14.0

7.9% Perpetual capital securities

13

198.1

198.1

7.0 %Perpetual cumulative capital notes

13

321.9

-

-

Total equity


1,701.0

1,218.4

1,300.5

Liabilities





Non-current liabilities




Interest bearing loans and borrowings

14

83.1

-

Pension deficit

16

26.0

28.3

Provisions


1.5

5.9

Deferred tax liabilities


32.4

44.6

36.4

Total non-current liabilities


70.7

155.2

70.6

Current liabilities





Investment contract liabilities

11

1,388.5

2,311.9

Interest bearing loans and borrowings

14

-

81.5

Trade and other payables


272.5

269.4

Current tax payable


55.0

38.5

37.5

Total current liabilities


3,068.7

1,699.5

2,700.3

Total liabilities


3,139.4

1,854.7

2,770.9

Total equity and liabilities


4,840.4

3,073.1

4,071.4

 

 

Condensed consolidated statement of changes in equity

For the six months to 31 March 2013

 

 

 

 

 

Share

capital

£m

Share

Premium

account

£m

 

Other

reserves

£m

 

Retained

earnings

£m

Non

Controlling

interest

£m

Perpetual

Capital

securities

£m

 

Total

equity

£m

Balance at 1 October 2012

115.1

815.9

209.0

(51.6)

14.0

198.1

1,300.5

Profit for the period

-

-

-

145.7

-

7.6

153.3

Other comprehensive income

-

-

32.5

-

-

-

32.5

Total comprehensive income

-

-

32.5

145.7

-

7.6

185.8

Conversion of convertible bonds

4.7

82.3

(6.2)

6.2

-

-

87.0

Issue of perpetual capital notes

-

-

-

-

-

321.9

321.9

Share based payment charge

-

-

-

20.6

-

-

20.6

Purchase of own shares

-

-

-

(123.8)

-

-

(123.8)

Dividends paid to shareholders

-

-

-

(82.2)

-

(7.6)

(89.8)

Non-controlling interest in
consolidated funds

-

-

-

-

(1.2)

-

 

(1.2)

At 31 March 2013

119.8

898.2

235.3

(85.1)

12.8

520.0

1,701.0

 

 

For the six months to 31 March 2012

 

 

 

 

 

Share

capital

£m

Share

Premium

account

£m

 

Other

reserves

£m

 

Retained

earnings

£m

Non

Controlling

interest

£m

Perpetual

Capital

securities

£m

 

Total

equity

£m

Balance at 1 October 2011

114.9

812.2

216.8

(123.7)

16.2

198.1

1,234.5

Profit for the period

-

-

-

93.6

-

7.2

100.8

Other comprehensive expense

-

-

(3.0)

-

-

-

(3.0)

Total comprehensive (expense) income

-

-

(3.0)

93.6

-

7.2

97.8

Share based payment charge

-

-

-

25.6

-

-

25.6

Purchase of own shares

-

-

-

(72.5)

-

-

(72.5)

Dividends paid to shareholders

-

-

-

(57.6)

-

(7.2)

(64.8)

Non-controlling interest in

consolidated funds

-

-

-

-

(2.2)

-

 

(2.2)

At 31 March 2012

114.9

812.2

213.8

(134.6)

14.0

198.1

1,218.4

 

 

For the year to 30 September 2012

 

 

 

 

 

Share

capital

£m

Share

Premium

account

£m

 

Other

reserves

£m

 

Retained

earnings

£m

Non

Controlling

interest

£m

Perpetual

Capital

securities

£m

 

Total

equity

£m

Balance at 1 October 2011

114.9

812.2

216.8

(123.7)

16.2

198.1

1,234.5

Profit for the period

-

-

-

208.7

-

14.9

223.6

Other comprehensive expense

-

-

(6.7)

(1.4)

-

-

(8.1)

Total comprehensive (expense) income

-

-

(6.7)

207.3

-

14.9

215.5

Arising on the issue of shares

-

0.1

-

-

-

-

0.1

Conversion of convertible bonds

0.2

2.8

(0.3)

0.3

-

-

3.0

Conversion of preference shares

-

0.8

(0.8)

-

-

-

-

Share based payment charge

-

-

-

53.8

-

-

53.8

Purchase of own shares

-

-

-

(83.1)

-

-

(83.1)

Dividends paid to shareholders

-

-

-

(106.2)

-

(14.9)

(121.1)

Non-controlling interest in

consolidated funds

 

-

 

-

 

-

 

-

 

(2.2)

 

-

 

(2.2)

At 30 September 2012

115.1

815.9

209.0

(51.6)

14.0

198.1

1,300.5

 

 

Condensed consolidated cash flow statement

For the six months to 31 March 2013


 

 

 

 

Notes

 

6 months to

31 March

2013

£m

 

6 months to

31 March

2012

£m

 

Year to

30 September

2012

£m

Core cash generated from operating activities


221.2

162.8

419.8

Effects of short-term timing differences on open end fund settlements


 

26.5

 

1.8

 

(5.3)

Cash generated from operations


247.7

164.6

414.5

Net interest received (paid)


0.9

(1.4)

(2.1)

Tax paid


(21.8)

(19.8)

(43.6)

Net cash generated from operating activities

4

226.8

143.4

368.8

Cash flows used in investing activities





Proceeds from sale of investments


9.3

28.0

52.4

Purchase of intangible assets


(4.1)

(8.0)

(13.4)

Purchase of property, plant & equipment


(2.6)

(3.3)

(7.6)

Purchase of investments


(63.9)

(18.7)

(53.8)

Net cash used in investing activities


(61.3)

(2.0)

(22.4)

Cash flows from financing activities





Issue of perpetual cumulative capital notes


321.9

-

-

Purchase of own shares


(123.8)

(72.5)

(83.1)

Dividends paid and coupon payments


(92.1)

(67.5)

(126.0)

Net cash from (used in) financing activities


106.0

(140.0)

(209.1)

Net increase in cash and cash equivalents


271.5

1.4

137.3

Cash and cash equivalents at beginning of period


347.9

209.5

209.5

Effect of exchange rate fluctuations on cash and cash equivalents


19.5

(2.3)

1.1

Cash and cash equivalents at end of period


638.9

208.6

347.9

 

 

Notes to the interim condensed consolidated financial statements

For the six months to 31 March 2013

 

1    General information

The interim results have not been audited but have been reviewed by the auditor. The condensed comparative figures for the financial year to 30 September 2012 are not the company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditor and delivered to the Registrar of Companies. The auditor's report was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

 

2    Accounting policies

      Basis of preparation

These condensed financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The annual financial statements are prepared in accordance with IFRS as adopted by the EU.

 

As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 30 September 2012.

 

The preparation of interim financial statements requires management to make estimates and assumptions that affect the reported income and expense, assets and liabilities and disclosure of contingencies at the date of the interim financial statements. Although these estimates and assumptions are based on management's best judgement at the date of the interim financial statements, actual results may differ from these estimates. The interim financial statements, which are in a condensed format, do not include all the information and disclosures required in the Group's annual report, and should be read in conjunction with the Group's annual report for the year ended 30 September 2012.

 

      Going concern

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than twelve months from the date of this report. Accordingly, it is appropriate to adopt the going concern basis in preparing the condensed financial statements.

 

      Segmental disclosures

The Group operates a single business segment of asset management for reporting and control purposes.

                                                                                                                 

IFRS 8 Operating Segments requires disclosures to reflect the information which the Group Management Board (GMB), being the body that is the Group's chief operating decision maker, uses for evaluating performance and the allocation of resources. The Group is managed as a single asset management business, with multiple investment strategies of equities, fixed income and property, complemented by a solutions business which provides multi asset and fund of alternatives services. These strategies are managed across a range of products, distribution channels and geographic regions. Reporting provided to the GMB is on an aggregated basis.

 

3    Revenue



6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

Revenue comprises:





Gross management fees


598.8

477.1

993.1

Commissions to intermediaries


(112.6)

(87.2)

(179.6)

Net management fees


486.2

389.9

813.5

Performance fees


23.5

17.4

47.5

Transaction fees


6.3

5.8

8.2



516.0

413.1

869.2

 

 

4    Analysis of cash flows


6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

Reconciliation of profit after tax to operating cash flow




Profit after tax

153.3

100.8

223.6

Depreciation  

3.3

4.3

8.3

Amortisation of intangible assets

34.6

37.9

78.1

Unrealised foreign currency losses (gains)

-

0.9

(1.0)

Gains on investments

(0.6)

-  

(0.2)

Share based element of remuneration

20.6

25.2

61.9

Net finance costs

3.9

2.6

5.1

Income tax expense

34.9

23.5

46.1


250.0

195.2

421.9

Increase (decrease) in provisions

5.7

(0.7)

3.7

(Increase) decrease in stock

(0.1)

0.1

0.2

(Increase) decrease in trade and other receivables

(39.3)

5.2

(1.4)

(Increase) decrease in open end fund receivables

(49.1)

30.7

69.7

Increase (decrease) in trade and other payables

4.9

(37.0)

(4.6)

Increase (decrease) in open end fund payables

75.6

(28.9)

(75.0)

Net cash inflow from operating activities

247.7

164.6

414.5

Net interest received (paid)

0.9

(1.4)

(2.1)

Income taxes paid

(21.8)

(19.8)

(43.6)

Net cash generated from operating activities

226.8

143.4

368.8

 

 

5    Net finance costs


6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

Reconciliation of profit after tax to operating cash flow








Interest on overdrafts, revolving credit facilities and other interest bearing accounts

Interest on 3.5% convertible bonds

 

1.8

(0.9)

 

0.8

1.5

 

1.7

3.2

Release of discount on liability component on convertible bonds

4.0

1.0

2.0

Amortisation of issue costs on convertible bonds

1.1

0.3

0.5

Total finance costs

6.0

3.6

7.4

Finance revenue - interest income

(2.1)

(1.0)

(2.3)

Net finance costs

3.9

2.6

5.1

 

 

6.  Tax expense


6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

Current tax expense

40.1

27.8

54.4

Adjustments in respect of previous periods

-

0.4

(2.1)

Deferred tax credit

(7.0)

(5.9)

(6.8)

Adjustments in respect of previous periods

1.8

1.2

0.6

Total tax expense in income statement

34.9

23.5

46.1

 

The tax charge for the six month period ended 31 March 2013 is calculated using the expected effective annual tax rate in each country of operation and applying these rates to the results of each country for the first six months of the year.

 

 

7    Dividends and coupon payments


6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

Dividend on convertible preference shares:   




Dividend paid  

-

-

0.2

Coupon payments in respect of 7.9% perpetual capital securities




Coupon payments made during the period 

9.9

9.9

19.8

Ordinary dividends




Declared and paid during the year




Final dividend for 2012 - 7.1p (2011 - final dividend 5.2p )

82.2

57.6

57.6

Interim dividend for 2012 - 4.4p

-

-

48.4


82.2

57.6

106.0

Total dividends and coupon payments paid during the period

92.1

67.5

126.0

 

The interim ordinary dividend of 6.0p per share will be paid on 13 June 2013 to qualifying shareholders on the register at 10 May 2013.

 

8    Earnings per share

The calculations of earnings per share are based on the following profits and numbers of shares.

 

Basic earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

 

Diluted earnings per share amounts are calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the potentially dilutive shares into ordinary shares.

 

Underlying earnings per share figures are calculated by adjusting the profit to exclude amortisation of intangible assets.

 

The purpose of providing the underlying earnings per share is to allow readers of the accounts to clearly consider trends without the impact of certain non-cash items.

 

 


IAS 33

Underlying


6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

6 months to

31 March

2013

£m

6 months to

31 March

2012

£m

Year to

30 September

2012

£m

Basic earnings per share







Profit attributable to shareholders

153.3

100.8

223.6

153.3

100.8

223.6

Dividend on convertible preference shares

-

(0.1)

(0.2)

-

(0.1)

(0.2)

Coupon payments in respect of perpetual capital securities (net of tax)

 

(7.6)

 

(7.2)

 

(14.9)

 

(7.6)

 

(7.2)

 

(14.9)

Profit for the financial period, attributable to ordinary shareholders

 

145.7

 

93.5

 

208.5

 

145.7

 

93.5

 

208.5

Amortisation of intangible assets, net of attributable taxation




 

29.4

 

29.8

 

61.5

Underlying profit for the financial period




175.1

123.3

270.0

Weighted average number of shares (millions)

1,137.1

1,103.0

1,104.2

1,137.1

1,103.0

1,104.2

Basic earnings per share

12.81p

8.48p

18.88p

15.40p

11.18p

24.45p

Diluted earnings per share







Profit for calculation of basic earnings per share, as above

 

145.7

 

93.5

 

208.5

 

175.1

 

123.3

 

270.0

Add: interest on 2014 convertible bonds, net of attributable taxation

 

3.2

 

2.1

 

4.3

 

3.2

 

2.1

 

4.3

Add: dividend on convertible preference shares

-

0.1

0.2

-

0.1

0.2

Profit for calculation of diluted earnings per share

 

148.9

 

95.7

 

213.0

 

178.3

 

125.5

 

274.5

Weighted average number of shares (millions)






For basic earnings per share

1,137.1

1,103.0

1,104.2

1,137.1

1,103.0

1,104.2

Dilutive effect of 2014 convertible bonds

12.5

48.6

48.6

12.5

48.6

48.6

Dilutive effect of convertible preference shares

-

4.5

3.1

-

4.5

3.1

Dilutive effect of LTIP awards

0.1

0.3

0.2

0.1

0.3

0.2

Dilutive effect of exercisable share options and deferred shares

 

48.1

 

47.0

 

57.5

 

48.1

 

47.0

 

57.5


1,197.8

1,203.4

1,213.6

1,197.8

1,203.4

1,213.6

Diluted earnings per share

12.43p

7.95p

17.55p

14.88p

10.43p

22.62p

 

 

9    Intangible assets


31 March

2013

£m

31 March

2012

£m

30 September

2012

£m

Intangible assets

314.5

376.9

341.2

Goodwill

658.8

654.8

652.9


973.3

1,031.7

994.1

 

 

10  Other investments


31 March

2013

£m

31 March

2012

£m

30 September

2012

£m

Non-current assets




Non-current investments

54.4

38.9

53.1

Current assets




Seed capital investments

81.5

31.9

40.4

Investments of life and pensions subsidiary  

10.0

-

6.6

Investments in funds to hedge deferred bonus liabilities

27.1

11.7

11.5

Liquid investments held for trading

-

19.2

-


118.6

62.8

58.5

 

Seed capital investments comprise amounts invested in funds when the intention is to dispose of these as soon as practicably possible.

 

11  Assets backing investment contract liabilities

These balances represent unit linked business carried out by the Group's life assurance and pooled pensions subsidiary. The risks and rewards of these assets fall to the benefit of or are borne by the underlying policyholders. Therefore, the investment contract liabilities shown in the Group's balance are equal and opposite in value to the assets held on behalf of the policyholders. The Group has no direct exposure to fluctuations in the value of assets which are held on behalf of policyholders, nor to fluctuations in the value of the assets arising from changes in market prices or credit default. The Group's exposure to these assets is limited to the revenue earned, which varies according to movements in the value of the assets.

 

12  Share capital 

419,700 ordinary shares of 10p each were issued in respect of the exercise of share options granted to employees under the 1994 Executive Share Option Scheme.

 

47,027,013 ordinary shares of 10p each were issued in respect of the conversion of £87 million of 3.5% convertible bonds 2014.

 

13  Perpetual capital securities 

On 1 March 2013 the Company issued US$500 million perpetual cumulative capital notes. The securities bear interest on their principal amount at 7.0% per annum, payable quarterly in arrears on 1 March, 1 June, 1 September and 1 December in each year commencing on 1 June 2013. Net proceeds after deduction of issue expenses were £322 million.

 

US$400 million of the proceeds will be used to repay the 7.9% perpetual capital securities on 29 May 2013. The estimated reduction in equity arising from this repayment, based on the exchange rate at 31 March 2013, is £263 million.

 

14  Interest bearing loans and borrowings


31 March

2013

£m

31 March

2012

£m

30 September

2012

£m

Non-current liabilities




3.5% Convertible bonds 2014

-

83.1

-





Current liabilities




3.5% Convertible bonds 2014

-

-

81.5

 

On 31 October 2012, the Company notified remaining bondholders that all outstanding bonds in issue on 3 January 2013 would be redeemed in full. All bondholders exercised their conversion rights prior to the redemption date and the remaining bonds were converted into ordinary shares of the Company at a conversion price of 185p.

 

15  Analysis of changes in net cash


 

At

1 October

2012

£m

 

 

Cash

flow

£m

 

Other

non cash

changes

£m

 

 

Exchange

movement

£m

 

At

31 March

2013

£m

Cash at bank and in hand

347.9

271.5

-

19.5

638.9

Convertible debt 

(81.5)

-

81.5

-

-

Net cash

266.4

271.5

81.5

19.5

638.9

 

16  Retirement benefits

The Group's principal form of pension provision is by way of three defined contribution schemes operated worldwide. The Group also operates a number of legacy defined benefit schemes. There are three schemes in the UK which are closed to new membership and to future service accrual, two schemes in Japan and schemes in Germany, Norway and Finland.

 

The actuarial valuations of the defined benefit pension schemes referred to above were updated to 30 September 2012 by the respective independent actuaries. Contributions to the schemes since 30 September 2012 have been set off against the scheme deficits.


31 March

2013

£m

31 March

2012

£m

30 September

2012

£m

Surplus in scheme at end of period

12.9

5.4

12.9

Deficits in schemes at end of period

(26.7)

(26.0)

(28.3)


(13.8)

(20.6)

(15.4)

 

17  Contingent liabilities 

The Group may, from time to time, be subject to claims, actions or proceedings in the normal course of its business. When such circumstances arise, the Board considers the likelihood of a material outflow of economic resources and provides for its best estimate of costs where an outflow of economic resources is probable. While there can be no assurances, the directors believe, based on information currently available to them, that the likelihood of other material outflows is remote.

 

18  Post balance sheet events

On 14 February 2013 the Group announced that it had reached an agreement to acquire the entire share capital of Artio Global Investors Inc, a US listed asset manager, for a purchase consideration of approximately US$175 million.

 

On the same date the Group also announced that it had agreed to acquire a 50.1% stake in SVG Advisers ("SVGA") for a cash consideration of £17.5 million. SVGA is a fund of private equity specialist and its business will be combined with Aberdeen's existing fund of private equity capability. There are put and call options under which the Company may acquire the remaining 49.9% stake at any time from the third anniversary of completion.

 

Both transactions are expected to complete in the second half of the current financial year.

 

 

Principal risks

In common with many businesses, the Group is exposed to a range of risks. Some of these risks are an inherent part of the business conducted by the Group such as taking investment decisions on behalf of clients and our energies are focussed on managing this risk as opposed to eliminating it. On the other hand there is regulatory risk which we actively seek to avoid.

 

The management of risk is embedded in the culture of the business and in the way in which the Group carries out its business. The Risk Management Committee together with the Risk, Compliance, and Internal Audit departments are responsible for overseeing the implementation of the Group's risk strategies and this involves the provision of regular reports to the Group Board.

 

The principal risks to which the Group will be exposed in the second half of the financial year are substantially the same as those described on pages 31 to 33 of the 2012 annual report, being investment process and mandate, loss of investment personnel, legal and regulatory, client relationship and retention, business continuity, supplier, credit, liquidity and foreign currency risks.

 

Responsibility statement

We confirm that to the best of our knowledge:

•     the condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

•     the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the current financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and 

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

For and on behalf of the Board

 

Scott E Massie

Secretary

26 April 2013

 

 

Independent review report to Aberdeen Asset Management PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2013 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

 

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

 

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

 

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2013 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

 

Guy Bainbridge

for and on behalf of KPMG Audit Plc

Chartered Accountants

37 Albyn Place

Aberdeen

AB10 1JB

 

26 April 2013

 

 

Assets under Management at 31 March 2013


30 September

2012

£bn

31 December

2012

£bn

31 March

2013

£bn

Equities

100.7

108.3

124.3

Fixed income

36.3

35.8

37.4

Aberdeen solutions

23.6

23.5

24.4

Property

18.7

18.3

18.5

Money market

7.9

7.5

7.7


187.2

193.4

212.3

Segregated mandates

102.8

102.8

110.2

Pooled funds

84.4

90.6

102.1


187.2

193.4

212.3

 

 

Overall new business flows for 6 months to 31 March 2013 - By mandate type


3 months to

31 December

2012

£m

3 months to

31 March

2012

£m

6 months to

31 March

2013

£m

Gross inflows:




  Segregated mandates

3,328

2,996

6,324

  Pooled funds

7,476

10,804

18,280


10,804

13,800

24,604

Outflows:




  Segregated mandates

4,905

4,028

8,933

  Pooled funds

4,841

6,438

11,279


9,746

10,466

20,212

Net flows:




  Segregated mandates

(1,577)

(1,032)

(2,609)

  Pooled funds

2,635

4,366

7,001


1,058

3,334

4,392

 

 

Overall new business flows for 6 months to 31 March 2013 - By asset class


3 months to

31 December

2012

£m

3 months to

31 March

2013

£m

6 months to

31 March

2013

£m

Gross inflows:




  Equities

6,701

10,052

16,753

  Fixed income

1,950

1,862

3,812

  Aberdeen solutions

1,089

668

1,757

  Property

176

68

244

  Money market

888

1,150

2,038


10,804

13,800

24,604

Outflows:




  Equities

3,587

5,327

8,914

  Fixed income

2,725

2,449

5,174

  Aberdeen solutions

1,532

1,340

2,872

  Property

549

106

655

  Money market

1,353

1,244

2,597


9,746

10,466

20,212

Net flows:




  Equities

3,114

4,725

7,839

  Fixed income

(775)

(587)

(1,362)

  Aberdeen solutions

(443)

(672)

(1,115)

  Property

(373)

(38)

(411)

  Money market

(465)

(94)

(559)


1,058

3,334

4,392

 

 

New business flows for 6 months to 31 March 2013 - Equities


3 months to

31 December

2012

£m

3 months to

31 March

2013

£m

6 months to

31 March

2013

£m

Gross inflows:




  Asia Pacific

2,415

4,430

6,845

  Global emerging markets

3,260

4,482

7,742

  Europe

23

24

47

  Global & EAFE

926

1,038

1,964

  UK

25

41

66

  US

52

37

89


6,701

10,052

16,753

Outflows:




  Asia Pacific

991

1,390

2,381

  Global emerging markets

1,563

2,914

4,477

  Europe

50

39

89

  Global & EAFE

617

873

1,490

  UK

72

55

127

  US

294

56

350


3,587

5,327

8,914

Net flows:




  Asia Pacific

1,424

3,040

4,464

  Global emerging markets

1,697

1,568

3,265

  Europe

(27)

(15)

(42)

  Global & EAFE

309

165

474

  UK

(47)

(14)

(61)

  US

(242)

(19)

(261)


3,114

4,725

7,839

 

 

New business flows for 6 Months to 31 March 2013 - Fixed income


3 months to

31 December

2012

£m

3 months to

31 March

2013

£m

6 months to

31 March

2013

£m

Gross inflows:




  Asia Pacific

160

166

326

  Australia

395

268

663

  Convertibles

17

32

49

  Currency overlay

13

57

70

  Emerging markets

1,043

946

1,989

  Europe

60

30

90

  Global

15

81

96

  High yield

136

197

333

  UK

66

23

89

  US

45

62

107


1,950

1,862

3,812

Outflows:




  Asia Pacific

175

131

306

  Australia

780

383

1,163

  Convertibles

9

14

23

  Currency overlay

114

9

123

  Emerging markets

233

403

636

  Europe

346

249

595

  Global

436

160

596

  High yield

48

114

162

  UK

434

821

1,255

  US

150

165

315


2,725

2,449

5,174

Net flows:




  Asia Pacific

(15)

35

20

  Australia

(385)

(115)

(500)

  Convertibles

8

18

26

  Currency overlay

(101)

48

(53)

  Emerging markets

810

543

1,353

  Europe

(286)

(219)

(505)

  Global

(421)

(79)

(500)

  High yield

88

83

171

  UK

(368)

(798)

(1,166)

  US

(105)

(103)

(208)


(775)

(587)

(1,362)

 

 

New business flows for 6 months to 31 March 2013 - Aberdeen solutions


3 months to

31 December

2012

£m

3 months to

31 March

2013

£m

6 months to

31 March

2013

£m

Gross inflows:




  Indexed equities

46

1

47

  Multi asset

535

418

953

  Long only multi manager

458

208

666

  Funds of hedge funds

50

41

91


1,089

668

1,757

Outflows:




  Indexed equities

98

151

249

  Multi asset

350

205

555

  Long only multi manager

747

686

1,433

  Funds of hedge funds

337

298

635


1,532

1,340

2,872

Net flows:




  Indexed equities

(52)

(150)

(202)

  Multi asset

185

213

398

  Long only multi manager

(289)

(478)

(767)

  Funds of hedge funds

(287)

(257)

(544)


(443)

(672)

(1,115)

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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