Vowel-shy asset manager Abrdn reported “highest overall rates of growth” since the mega-merger which created the group in 2017.
In its half year results the company also confirmed it has staunched a flow of investor cash – it said outflows reduced to £5.6billion compared to around £25bn the previous year.
Chief executive Chris Bird said Abrdn had set “near term goals to put us on the right path towards our financial targets – arrest the decline in revenue, and
improve our operating leverage”.
He confirmed: “We have made a strong start towards achieving those two objectives.”
Fee-based revenues were 7% higher to £755 million and adjusted operating profit – its preferred measure of profits – up 52% to £160 million higher than prior year which were the “highest rates of growth since merger”. The firm was formed when Standard Life and Aberdeen Asset Management joined forces in a deal worth £11bn.
The company, which recently walked away from its sponsorship of the Scottish Open series, also announced the acquisition of AI-powered wealth management company called Exo Investing from Nucoro, a London-based software firm, for an undisclosed sum.
The deal will allow Abdn to offer “24/7 digital wealth management” to investors via an app.
Robo-manager to address downward pressure on fees
Mr Bird said: “Exo was the first of its kind to offer a fully automated wealth management platform, leveraging machine learning to feed into portfolio decision-making.
“There is a downward pressure on fees, changing customer expectations and increasing regulatory requirements. It’s important to address these issues by providing a highly-scalable, next-generation service to investors.”
John Moore, senior investment manager at Brewin Dolphin, said there were a “number of positives” in the firm’s half year results coming after a “tricky period of restructuring, cost-cutting, and rebranding”.
Shares look ‘too cheap’
He said: “The reduction in net outflows, improved margin, and increase to profits, in particular, look positive, while the dividend remains in line with plans and is among the highest on the FTSE 100 – even after it was re-based last year.”
As shared edged down 1.8% in early trading, Mr Moore noted that its valuation looked “too cheap” albeit this may be pricing in challenges ahead.
He said: “On paper, the shares look too cheap relative to the sum of Abrdn’s parts, which reflects worries about the company’s future direction in a rapidly changing and consolidating sector, as well as the continued pressure from a wider investor shift from active to passive investing.
“There are some positive signs, but despite some big moves over the last few years, there remain strategic questions over what is next for Abrdn.”
Standard Life Aberdeen attracted widespread attention when it unveiled plans in April to rename itself as Abrdn in an effort to bring its business under one name and to boost its digital presence.