ABERDEEN Asset Management today warned that market conditions are expected to remain challenging "for some time to come" after posting a sharp decline in profits.
The Scottish asset manager, which has an office at 40 Princes Street in Edinburgh, said it is to face up to the downturn by stripping out an additional £20 million of costs on top of the £77m of "efficiencies" already announced, which it said are pro
ceeding on schedule.
Profits before tax in the six months to the end of March slumped to £33m, from £47.3m in the same period a year earlier.
Despite his forecast that the market conditions will remain tough, chief executive Martin Gilbert insisted that the company could still perform well and take advantage of opportunities brought about by the downturn.
"Aberdeen is well-placed to succeed in current market conditions, which we expect will remain challenging for some time to come," said Mr Gilbert.
"We have a broad spread of activities, a strong balance sheet and a relentless focus on costs.
"Taken together, these give us a significant advantage over some of our competitors."
Towards the end of last year, Aberdeen announced that it will buy the asset management division of Credit Suisse in a deal worth around £250 million.
The deal is to make the firm the UK's biggest fund manager.
As part of the deal, Credit Suisse will become Aberdeen's largest shareholder with a stake of around 25 per cent, while Aberdeen's products will also distributed through Credit Suisse's private bank.
Mr Gilbert said that the firm's acquisition of the Credit Suisse business is proceeding "on schedule" and once complete "will further strengthen the firm's global network".
The firm did not specify exactly how the additional £20m of cost savings would be made.
In a statement, it said: "The financial crisis continues to weigh heavily on the global economy and markets. Despite these challenges, the group's diversified business model and the breadth and scale of its client and asset base provides considerable resilience.
"In addition, since the current downturn began, we have focussed on our cost base. We have previously announced some £77m of gross annualised cost reductions which, net of consequent income loss, will deliver £60m of net annualised savings, with £50m expected to benefit the current financial year.
"Implementation of these savings, is proceeding on schedule, with a net benefit of £20m in the first half year and a further £30m due to be completed during the second half."
It added: "The market cycle is currently at a stage where attractive acquisition opportunities are likely to arise and we are well placed to benefit from industry consolidation."
