Monday, 29 April 2013

Aberdeen & Greggs Update

Good news and not-so-good news this morning. Aberdeen Asset announced their half year results and the share price rose 8% to 452p - Greggs issued a trading update and the sp fell 8% to 425p.

Aberdeen Asset Management

Money continues to flow into the equity markets and ADN seem well placed to take full advantage. Assets under management increased 13% to £212bn and profits increased 37% to £222.8m.

CEO, Martin Gilbert said:

"It has been a strong first half to the year with investors' appetite for risk assets returning. As a result we have seen healthy net new business flows which, combined with performance by global markets, has generated strong growth in our revenue and in profit margins. We remain cautious on the market outlook but believe our fundamental approach to investing will continue to serve our clients' long term needs".

Demand from investors has been so strong, they have needed to moderate the inflows to their emerging markets funds so as not to compromise on quality.

They also announced a 36% uplift in the interim dividend to 6p. I have therefore revised my full year figure to 14.5p which puts it on a forward yield of 3.2%.


Greggs statement is for the 17 weeks to 27th April - although 10 new shops have been added in the new year and sales overall are up 3%, the like-for-like sales are down 4.4% and the management have said that profits for the full year are likely to be slightly below the lower range of market expectations of £47.5m (£51.9m 2012).

On the positive side, they have completed 59 out of the 250 shop refurbs planned for 2013, the frozen 'bake at home' range in conjunction with Iceland is successful and the business remains highly cash generative and maintains a strong balance sheet.

Given the current outlook, I am not expecting much (or any) uplift in the dividend this year - at the current level of 19.5p the shares are yielding 4.6%.

Fingers crossed the new CEO can turn things around over the coming 12 months.

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