Aberdeen Asset Management targets costs

LONDON (Reuters) - Fund firm Aberdeen Asset Management on Monday said it was embarking on a fresh round of cost-cutting as annual core profit inched higher, but fell below a consensus of analysts' expectations.

Core profit was at 95.1 million pounds, up from 94.3 billion pounds a year earlier. Dresdner Kleinwort analysts had cited a market consensus at 95.9 million pounds.

Assets under management rose 17 percent to 111.1 billion pounds from 95.3 billion pounds at end-2007, boosted by acquisitions and net inflows of 1 billion pounds, despite 20.8 billion pounds of investor redemptions.

Shares in the company were at 81 pence at 09:17 a.m., down 9.0 pence or 10 percent. Broker Evolution Securities reiterated a "sell" rating for the stock despite the slight rise in profits.

"Markets are difficult, margins are under pressure, performance is poor in U.S. credit and Aberdeen is rightly responding with a further 20 million pound cost reduction programme," Evolution said in a note. It added that Aberdeen's premium valuation on an EV/EBITDA basis compared to its peer group is "unjustified."

Aberdeen CEO Martin Gilbert said in a statement: "Conditions in the asset management industry are tough and will remain so for some time."

"We will continue to manage the business tightly, but we also remain keen to take advantage of relevant growth opportunities that may emerge during this turbulent period."

Chairman Charles Irby said new revenues from acquisitions had outweighed the effects of declining markets in 2008. He added that the company will implement further annualised cost savings of 20 million pounds on top of the 57 million pounds of cost cuts announced in July.

The firm has already outsourced 200 jobs in its property arm and is not replacing staff who leave, but a spokesman would not be drawn on the potential for job losses in the latest round of savings.