Abrdn profit up 47% to £323m as outflows improve

Abrdn CEO Stephen Bird

Edinburgh-based investment giant Abrdn on Tuesday reported a 47% rise in 2021 adjusted operating profit to £323 million as its fee-based revenue rose 6% to £1.515 billion.

Abrdn said net outflows fell to £6.2 billion from £29 billion in 2020.

It said assets under management and administration rose £7 billion or 1% to £542 billion “reflecting positive market movements, the impact of corporate actions and net flows.”

The Edinburgh firm said IFRS profit before tax rose to £1.115 billion from £838 million “primarily reflecting the recognition of the full market value of our residual stake in HDFC Asset Management and the gain on sale of the c5% stake in September 2021.”

Full year dividend is maintained at 14.6p.

Abrdn CEO Stephen Bird said: “This was our reset year.

“In 2021 we set out a clear strategy for how we will create long-term sustainable growth and arrest the decline in revenue.

“Today I am very pleased to report strong progress for this first year of our three year plan.

“We are delivering on our strategy for growth.

“For the first time since the merger, we have reported an increase in revenue for the full year – as well as an improved cost/income ratio of 79%, and a 47% increase in adjusted operating profit.

“We remain focused on delivering compound annual revenue growth in the high single figures.

“This will enable us to exit 2023 with a cost/ income ratio of around 70%.

“Strategically, we have made huge strides forward.

“We have simplified and extended the relationship with our largest client, Phoenix.

“We have successfully rebranded as Abrdn which gives us a unified global identity and purpose.

“We have divested non-core assets and built out our capabilities across our three vectors, including in private markets and digital content.

“More broadly, we have sharpened the focus of our Investments business to identify the key areas where we have a true competitive advantage.

“And, late in the year, we announced our proposed acquisition of Interactive Investor – a transaction that transforms our Personal vector, diversifies group revenues and significantly expands our client reach.

“As stated when we announced, this acquisition is expected to be double-digit earnings accretive in the first full financial year following completion.

“Clearly, markets are volatile right now.

“Geopolitical risk and inflation are rising and there remains an element of uncertainty about the pace at which different economies are recovering from the impacts of the COVID-19 pandemic.

“We benefit from a strong capital position enabling us both to continue to invest in the business and return money to shareholders.

“This balance underpins our ability to create long-term value for shareholders.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.