Standard Life Aberdeen PLC (LON:SLA) said the integration of its two investment platforms after the merger two and a half year ago is “proving more complex” than hoped.
The process, still rumbling on from the merger that created Europe's second-biggest fund manager in 2017, is now expected to take until 2021 to complete due to “additional complexity” resulting from the separation of technology after the group sold its UK and European insurance business in 2018.
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What’s more, as assets under management shrank to £544.6bn from £551.5bn over last year, a 13% decline in fee-based revenue to £1.6bn led to underlying profits before tax falling 10% to £584mln.
But chief executive Keith Skeoch said there was “growing momentum in the second half of the year across the business with improved investment performance and flows”.
“We remain on track to deliver targeted synergies and have identified more we can deliver as we continue to reshape the business and sustain resilience,” he said.
Around £400mln of annual synergies are now expected by the end of 2021, the “complexity” issues mean the cost of separation is now expected to be £310mln.
Nevertheless, the FTSE 100 group reported much stronger surplus capital of £1.7bn, after allowing for a flat final dividend of 14.3p, giving a full-year dividend of 21.6p.
“The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of COVID-19,” said Skeoch.