Edinburgh investment giant Abrd reported IFRS loss before tax of £615 million for the year ended December 31, compared to a £1.1 billion profit in the prior year, amid what the firm’s CEO called “one of the toughest investing years in living memory.”
Abrdn’s assets under management and administration (AUMA) fell 8% to £500 billion from £542 billion as the company reported a further year of net outflows of client funds.
Adjusted operating profit fell 19% to £263 million, driven by a decline in revenue at Abrdn’s investments business.
Assets under management (AUM) in its investments business fell 19% from £464 billion to £376 billion “reflecting lower markets and the final LBG (Lloyds Banking Group) tranche withdrawals.”
Abrdn merged or closed 58 funds in 2022.
Abrdn said the IFRS loss before tax of £615 million “reflects non-cash adjustments of £187m relating to the fall in share prices of our listed stakes and £369m in impairments.” It said 2021 benefited from “very substantial one-off accounting gains.”
Full year dividend per share is unchanged at 14.6p. Abrdn shares rose more than 2%.
“We returned £0.6bn of capital to shareholders by way of dividends and share buybacks in 2022, and intend to return a similar level in 2023,” said the Edinburgh firm.
Abrdn said net operating revenue fell 4% to £1.456 billion “with increased contributions from Adviser and Personal partially offsetting lower revenue in Investments largely driven by market movements.”
Gross inflows fell 5% to £69 billion — with net outflows widening to £37.9 billion from £6.2 billion.
Excluding the last Lloyds Banking Group withdrawals and “liquidity” net outflows were £10.3 billion.
Abrdn said the successful acquisition of ii during 2022 “delivered a substantial scaling up of our presence in the attractive UK savings and wealth market.”
It said ii delivered a strong performance over 12 months with net operating revenue 38% higher at £176 million and adjusted operating profit 109% higher at £94 million.
Net operating revenue at the group’s Adviser business was 4% higher at £185 million, with adjusted operating profit 16% higher at £86 million.
Abrdn CEO Stephen Bird said: “We are building a stronger Abrdn. As we exit year two of our three-year strategic plan, the structure of our group is now broadly set. We are increasingly well positioned for growth.
“In one of the toughest investing years in living memory, the resilience we have created in our business model helped us to deliver adjusted operating profit of £263m.
“Adviser and Personal, which benefited from the acquisition of ii, both delivered increased revenue and profits. This provided an important offset to the impact of market conditions on our Investments business.
“In Investments, gross flows excluding liquidity held up well at £49bn in spite of the considerably worse environment.
“Underlying net outflows were 3% of opening AUMA, excluding the last LBG withdrawals and liquidity, and were concentrated in equities.
“We are making progress on our commitment to focus on areas of scale and strength, and to simplify and reduce costs in the business.
“Overall, we are increasingly well positioned for the cycle turning. Our three businesses work well together and we are building the linkages that will create value across the group.
“Our capital position is strong and we are reinvesting into growth areas, while providing returns to shareholders.
“We look to the year ahead with confidence and a clear focus on delivering for clients and our wider stakeholders.”