Aberdeen Trust cuts payout to save 840,000 pounds

ABERDEEN Trust, the fund manager where George Robb stood down as chairman shortly before Christmas, is saving pounds 840,000 by cutting its dividend to a sustainable level, writes Paul Durman.

A 0.5p final reduces the total from 2.5p to 1.5p a share. The cut comes only four months after Abtrust agreed to pay pounds 5.6m to take on the investment management of pounds 430m of insurance funds from Century Group. Abtrust plans a period of consolidation and cost-cutting.

Since coming to the stock market two years ago, Abtrust has tripled funds under management to pounds 1.6bn at the cost of substantially reduced earnings. Operating profits fell again in the year to September although pre-tax profits improved from pounds 1.2m to pounds 1.8m because of the previous year's exceptional debit.

Martin Gilbert, the chief executive, said it was a 'bit drastic' to say things were going wrong. He said he was 'not entirely sure' about the level of Abtrust's debt, but it was about pounds 6m- pounds 7m after the Century deal. The company has net assets of pounds 10m- pounds 11m.

Abtrust said operating profits, down a third at pounds 1.8m, were hit by 'the economic decline affecting most international stock markets'.