Standard Life Aberdeen falls to loss as Covid hits revenue
Keith Skeoch: foundations are firm
Standard Life Aberdeen has announced an IFRS loss before tax of £498m (2019: £629m profit) as the Covid crisis caused a slump in revenue.
This was due to goodwill and intangible asset impairment charges of £1.049bn, primarily reflecting the impact of COVID-19 on financial markets and resulting revenue projections. It was partially offset by the gains on sales of Indian investments of £651m.
Adjusted profit before tax fell 30% to £195m (H1 2019: £280m).
Revenue came in at £706 million, down from £815 million in the same period 2019.
The company has maintained its interim dividend at 7.3p per share.
Despite the profit and revenue hits, the company still managed to deliver inflows of £0.1bn during the period compared to £15.9bn in net outflows a year ago, while 68% of its assets under management were above benchmark over three years.
Delivering his final set of results, Keith Skeoch, Chief Executive, said: “Despite exceptional circumstances we have delivered a resilient performance.
“In the first half of 2020 redemptions have slowed and net inflows have improved, excluding expected LBG withdrawals. Investment performance has been robust and we continue to deliver on our synergy commitments.
“There is no question that the impact of COVID-19 has played a role on our results today, and across our industry, particularly in relation to lower revenue.
“Our foundations are firm, we have a strong balance sheet which enables us to both invest in our business and maintain our interim dividend of 7.3p. “
Alasdair Ronald of Brewin Dolphin questioned the ability of the company to sustain the dividend. He said: “The new management team may elect for some form of ‘kitchen sinking’ exercise to give them a fresh start and separation from the sins of yore.
“The sustainability of the dividend remains a concern as it is not covered by operating cash flow.”
Stephanie Bruce, chief financial officer, admitted in a conference call that this was the case, but said the company had a strong balance sheet. “This enables us to take this decision,” she said.