UK fund management group Aberdeen Asset Management recorded a profit of £95.1m over its full trading year, ending 30 September, a rise of 0.8% over 2007. The group has decided to issue a final dividend of 3p per share, an increase of 5.5% compared to last year.

Aberdeen, which said assets under management grew to £111bn over the 12 month period, up from £95.3bn in 2007, said its acquisitions over the year as well as inflows from Continental Europe helped to offset the net redemptions from its mutual funds resulting from increased risk aversion among investors. After deducting redemptions of £20.8bn, net new business for the year totaled £1.0bn, according to Martin Gilbert, chief executive of Aberdeen.

Gilbert said: “Conditions in the asset management industry are tough and will remain so for some time.” Charles Irby, chairman, added: “Without doubt, we are now operating in an environment that is challenging all asset management firms in a number of ways. At the most fundamental level, fee income is under pressure, as assets fall and margin pressures increase.”

Operating costs increased by 32% over the course of the year, which the group largely attributed to businesses acquired during the year, which included a German-based property asset manager as well as a US fund management group. Aberdeen is looking to reduce annual operating costs by approximately £57m which it believes will deliver a net annualised benefit of approximately £40m, most of which it will not see until next year. In light of the continuing difficult conditions, Aberdeen is now looking to implement further annualised cost savings of approximately £20m, which it expects to be fully implemented by September 2009.

Irby, who is stepping down as chairman to be replaced by Roger Cornick, said: “We have seen extraordinary declines in asset prices over the past 12 months. Unfortunately, whatever action is undertaken by governments and central banks, markets are likely to remain difficult in the shorter term even if a measure of confidence does return.”

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