abrdn – flood becomes a trickle, but footing still unsure

abrdn – flood becomes a trickle, but footing still unsure

abrdn, formerly Standard Life Aberdeen, reported fee-based revenues in the first half of £755m, up 7% year-on-year. That reflects strong growth in the advisory business, while positive market movements largely offset modest net outflows in assets under management and administration (AUMA).

Underlying operating profits rose 52.4% to £160m, as operating expense remained broadly flat year-on-year, and underlying earnings per share of 7.0p.

The group reported an interim dividend per share of 7.3p.

The shares were broadly unmoved in early trading.

Nicholas Hyett, Equity Analyst at Hargreaves Lansdown comments:

“abrdn’s name change has coincided with a revenue recovery for the long suffering asset management group.

Assets continue to leak out the door, but the flood has become a trickle. Positive trends in the wider market means total assets under management have held up well, and more assets in lucrative emerging market equity and property funds, together with a strong result in advisory, has boosted overall revenues. Meanwhile lower costs, helped by the pandemic but also reflecting synergies from the 2017 merger, mean operating profits are flying.

However, there’s more work to do before abrdn is on really stable footing. Dividends continue to exceed profits and without the proceeds from selling stakes in HDFC and Parmenion, abrdn would have been eating into its capital reserves this half. The group’s planning a significant revenue inflection by the end of 2023, and really that can’t come soon enough.”