Abrdn: Scottish investment giant's results described as 'real mixed bag'

Bird said the firm was benefiting from a stronger business model as it continues to restructure under a three-year strategic plan. He told investors: “We continued to move at pace to execute our strategy over the first six months of 2023 in a challenging macro environment. Thanks to Abrdn’s revenue diversification and the resilience we have built into our business with the acquisition of Interactive Investor last year, we grew revenue by 4 per cent and adjusted operating profit by 10 per cent over the period. We are on track to deliver our £75m cost savings target in Investments as we continue our work to restore that business to a more acceptable level of profitability.”

Edinburgh-headquartered Abrdn, formerly known as Standard Life Aberdeen, has been buffeted by the turmoil in equity and bond markets. Rising geopolitical tensions and the conflict in Ukraine have also impacted the investment sector. The group posted net outflows of £4.4bn for the first six months of 2023. It also extended its share buyback plan to £300m from £150m announced in June.

John Moore, senior investment manager at wealth firm RBC Brewin Dolphin, said: “Abrdn’s results are a real mixed bag, but there are some tentative signs its move towards diversification is beginning to pay off. The addition of Interactive Investor is proving to be a major part of Abrdn’s transformation plan, while further acquisitions will bolster its offering,” he added. “Although its share price is up one-quarter on a year ago, Abrdn still has some way to go with its plans and there will be challenges ahead as markets remain volatile.”

In a note entitled “Financial Engineering is not a Strategy”, analysts at brokerage Panmure Gordon said: “Profits were short of our estimate and consensus: despite much stronger interest income other sources of revenue were lower than anticipated and costs higher. The turnaround of the business is taking longer, and is less apparent, than it needs to be after three years and another buy back, while sensible enough, is little compensation.”

The group’s IFRS loss before tax came in at £169m, compared with a loss of £326m a year earlier , largely driven by the fall in market value of its listed stakes. Net operating revenue was 4 per cent higher at £721m, with growth in the adviser and personal operations offsetting lower revenue in investments. An interim dividend of 7.3p a share was declared, covered 1.04 times by adjusted capital generation of £142m. It described the outlook for global markets as “uncertain”.

Scottish funds giant 'resilient' after swinging to loss and unveiling sale involving 140 staff