Abrdn's share price experienced a sharp decline of over seven per cent at market opening today following the release of its third-quarter results.
The investment company saw significant withdrawals from its funds in the last quarter, but inflows into its Interactive Investor self-invested platform mitigated some of the outflows, as reported by .
For the year ending 30 September 2024, Abrdn reported a two per cent increase in assets under management and administration (AUMA), reaching £507bn.
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Notably, the growth was primarily driven by its Interactive Investor platform, which saw assets climb from £66bn at the close of 2023 to £74.5bn by September's end.
Abrdn CEO Jason Windsor commented on the performance: "I'm pleased with the continued growth in Interactive Investor; meanwhile, there are challenges to overcome in adviser, where we aim to return to being the platform of choice for clients," and added, "In investments, we need to do more to capitalise on our strengths and improve performance and flows, particularly in equities."
The firm acquired Interactive Investor in 2022 for a sum of £1.5bn.
Customer numbers have been on the rise in the last quarter, with total customers hitting 430,000, marking a six per cent increase since the beginning of the year.
There has also been a notable 22 per cent surge in the number of customers utilising a self-invested personal pension, now totalling 76,000.
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Abrdn also confirmed that its cost-reduction strategy, announced earlier this year, is progressing as planned, with anticipated savings of £60m for the business by year-end.
Windsor commented on the company's direction, "We have plans in place to address our challenges and our transformation programme is on track," He further expressed optimism about the company's future, stating: "While there remains much to do, I am confident that we have great talent and we can make further progress towards profitable and sustainable long-term growth, benefiting our shareholders, clients, and colleagues."
Analysts weigh in on Abrdn’s results
City financial experts have cast doubt on Abrdn's recently announced figures. Analysts at RBC Europe expressed criticism, pointing out: "Although Abrdn has now, at least partially, addressed its cost base, the deterioration in net flows and fee margins have more than offset this self-help attempt as we forecast weakening revenues," labeling the figures as "a step back".
Other analysis firms like Panmure Liberum adjusted their forecasts, reducing expected operating profits by £30 million. Still, in a note of cautious optimism regarding Abrdn's leadership, Panmure Liberum acknowledged the tough market scenario while showing some confidence in Windsor's capability to steer the ship: "The challenges facing abrdn have long been obvious. Equally obvious was that the challenges were beyond the previous CEO. Our concern was that the sum-of-the-parts, oft the last resort of the scoundrel after all, would be eroded through management action, or inaction, towards the share price. While there remains a risk, of course, we also believe that there are some more signs of hope under Jason Windsor."