Rebranded Scottish investment giant Abrdn hails progress with transformation plans
Abrdn, the investment giant formerly known as Standard Life Aberdeen, has warned of further market volatility amid the fallout from the pandemic as it hailed a “strong start to the year”.
Unveiling first-half results for the Edinburgh-headquartered group, chief executive Stephen Bird said “good progress” was being made with the firm’s turnaround strategy.
The recent controversial name change is part of a wider shake-up aimed at putting the business back on a growth path by focusing on asset management, financial adviser technology, and direct-to-customer wealth management.
Bird told investors: “The improved flows into our strategically-important products and services show that we are answering client demand. The majority of the outflows that we are seeing are lower margin.
“We have made good progress in simplifying and focusing our business. The leadership team is now in place to drive the growth we seek through our strategic priorities. Our capital strength gives us the ability to invest in these priorities.
“We have a clarity of focus under our new brand and are better positioned to have impact at scale as a global business. We are at the beginning of the journey and we are moving at pace to build our new future.”
The interim results showed that fee-based revenue was up 7 per cent on a year earlier with adjusted operating profit 52 per cent higher at £160 million. They mark the highest rates of growth since 2017 merger of Standard Life and Aberdeen Asset Management.
Net outflows reduced to £5.6 billion, including liquidity net outflows of £3.7bn. Excluding liquidity flows, which are volatile, net outflows were £1.9bn, which the group said was a “significant improvement” over prior periods.
Assets under management and administration came in at £532bn, broadly flat as reductions due to flows and corporate actions were partially offset by “positive” market movements. An interim dividend of 7.3p per share was declared.
Bird added: “We have made a strong start to the year and our three-year growth plan. These results, the first as Abrdn plc, show a 52 per cent increase in adjusted operating profit.
“Low interest rates and central bank interventions have created supportive market conditions from which we have benefited. Market volatility is expected to continue due to Covid-19 and its unequal effects in different parts of the world.”
Alongside the results, the asset manager announced a deal to acquire digital wealth management provider Exo Investing from Nucoro for an undisclosed sum.
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, noted: “There are number of positives in today’s results from Abrdn, following a tricky period of restructuring, cost-cutting, and rebranding.”
The group unveiled plans to change its name to Abrdn in April in the wake of its deal to sell the 196-year-old Standard Life brand to Phoenix Group.
Insurer Phoenix acquired Standard Life Assurance in 2018 and already has some 2,800 staff based in Scotland, the majority at its operational HQ in the capital.
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