Abrdn has reported a positive shift in flows and advancements in its cost-saving initiatives as the investment firm prepares to select a new chief executive.
The FTSE 250-listed asset management company, which has faced challenges with fund outflows in recent years, announced net inflows of £800m for the first half of 2024. This marks a significant improvement from the £5.2bn of net outflows recorded during the same period last year.
Assets under management and administration (AUMA) at Abrdn increased to £505.9bn, up from £494.9bn, attributed to "positive market movements and flows".
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For the six-month period, Abrdn achieved an adjusted operating profit of £128m, slightly up from £127m the previous year. Following the announcement, the company's shares saw a 5.1 per cent increase on Tuesday morning.
Despite these gains, the firm experienced a seven per cent decrease in operating revenue to £667m. Abrdn cited the impact of fund outflows and anticipated lower margins in its investments business, as well as "the net impact of corporate actions", as contributing factors, as reported by .
The interim dividend was maintained at 7.3p per share, consistent with the prior year.
These developments occur as Abrdn seeks a new CEO following Stephen Bird's departure in May.
Jason Windsor, currently serving as the chief financial officer, has taken on the role of interim chief while the formal search is underway. Abrdn has stated that external candidates will be considered for the leadership position.
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Bird had driven a restructuring strategy for the company, aiming for cost-efficiency after a challenging period stemming from its £11bn merger with Standard Life in 2017. Following the divestment of Standard Life in 2021, the company underwent a widely criticised rebranding to Abrdn.
On Tuesday, Abrdn disclosed a nine per cent drop in adjusted operating expenses to £539m, which included an 11 per cent reduction in staff costs and a nine per cent cut in non-staff costs.
Windsor, the anticipated contender for Bird's role, reaffirmed his belief in the measures being taken to improve Abrdn's profitability.
"We have three core businesses, with strong, scale positions in attractive markets and each has headroom to grow," Windsor commented.
Furthermore, Windsor stated: "While market conditions remain challenging, we are firmly on track to realise at least £150m of annualised cost savings by the end of 2025."