Abrdn Losses Narrow But Outflows Persist

After announcing job cuts in January, Abrdn hopes a steady balance sheet will soothe investors

Alliance News 27 February, 2024 | 10:55AM
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Abrdn (ABDN) nearly broke even in 2023, following a big loss in 2022, after it slashed jobs and made other costs cuts. But, the beleaguered asset manager is still suffering more outflows of client money.

In its full-year results for 2023, the Edinburgh-based investment company reports an IFRS pretax loss of £6 million last year, narrowed substantially from a restated £612 million loss in 2022, despite net operating revenue declining by 4.0% to £1.40 billion from £1.46 billion.

This was thanks to total administrative and other expenses being reduced to £1.46 billion in 2023 from £1.92 billion in 2022. Just last month, Abrdn announced plans to cut around 500 jobs to save a further £150 million per year by the end of 2025. Currently, Abrdn currently employs around 5,000 people.

In the January announcement, Abrdn stated that assets under management and administration fell to £494.9 billion as of December 31 from £495.7 billion at June 30 and £500.0 billion at the end of 2022.

Net outflows worsened to £12.4 billion in the second half, from £5.2 billion in the first half, leaving net outflows of client cash for the full year at £13.9 billion, from £10.3 billion in 2022.

With the cost cuts and despite the decline in revenue and AuMA, Abrdn says its cost-to-income ratio stayed steady at 82%.

Abrdn also declares a 7.3 pence per share final dividend, meaning its full-year payout remains at 14.6p.

Stephen Bird, CEO of Abrdn, comments: "Our balance sheet remains strong which enables us to fund our cost transformation while continuing to strategically invest in growth areas and maintain our dividend.

"There is significant work ahead, but we are confident we will be successful in delivering future growth."

Abrdn shares were initially up 6.1% at 171.50 pence early Tuesday in London, but have since come down to 160.92p (at 10.30 AM), compared to 162.80p at market open. The stock remains down 20% over the past 12 months.

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