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Margins improve at Aberdeen Asset

Date: Tuesday 23 Mar 2010

Margins improve at Aberdeen Asset

Since the end of its financial year at the end of September Aberdeen Asset Management has seen assets under management increase by a shade over one-tenth.

Assets under management (AUM) at the end of February totalled £161.4bn, versus £146.2bn at the end of September 2009.

The AUM figure was boosted by a positive contribution of £12.1bn from corporate transactions, including the acquisition of RBS Asset Management, and a £6.7bn uplift from ‘markets, performance and foreign exchange’ which more than offset net business outflows of £3.6bn.

The rate of outflows appears to be slowing this year, with a net £1bn ebbing out in the first two months of 2010 compared to a net outflow of £2.6bn in the final three months of 2009.

‘Investment performance has continued to be strong and this is reflected in healthy new business flows into equities and property; we have seen some further redemptions from fixed income but it is encouraging to report that we are also winning new mandates in this area,’ the company said.

Gross new business flows in the five months to end February totalled £16.1bn, which compares favourably to the £19.1bn of new business flows in the whole of fiscal 2009.

Outflows over the same period were £19.7bn, but the company noted that the revenue margins earned on the inflows are higher than those on the outflows, which means the fee income should improve by around £18m per annum.

The group said its operating margin is comfortably above 30%, with cash generated being used to pay down bank borrowings.

‘Good new business flows, strong investment performance and improving margins continue to enable us to strengthen our balance sheet. We remain firmly focused on organic growth, generating cash and reducing debt,’ said Martin Gilbert, chief executive of Aberdeen Asset Management.

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