28th Feb 2023 09:24
(Alliance News) - abrdn PLC on Tuesday said its assets under management decreased during "one of the toughest investing years in living memory".
The investor and asset manager said net outflows surged last year, amid the "challenging events of 2022 [that] could not have been predicted".
abrdn's said net outflows stretched to GBP37.9 billion from GBP6.2 billion a year before, while assets under management and administration fell 7.8% to GBP500.0 billion from GBP542.1 billion.
Net operating revenue declined 3.9% to GBP1.46 billion from GBP1.52 billion, and abrdn swung to a pretax loss of GBP615 million from GBP1.12 billion profit.
Adjusted operating profit fell 19% to GBP263 million from GBP323 million.
"In one of the toughest investing years in living memory, the resilience we have created in our business model helped us to deliver adjusted operating profit of GBP263 million," Chief Executive Officer Stephen Bird said.
"Adviser and Personal, which benefited from the acquisition of ii, both delivered increased revenue and profits. This provided an important offset to the impact of market conditions on our Investments business."
Separately, it announced the disposal of abrdn Capital, its discretionary fund management business to LGT for GBP140 million. The business has AuM of GBP6.1 billion. LGT is a private banking and asset management group owned by the Princely House of Liechtenstein, a European principality.
abrdn Asian Income Fund Ltd and abrdn Latin American Income Fund Ltd noted the disposal. abrdn Latin America said the sale does not include abrdn Investments Ltd, which will remain within the abrdn group. abrdn Asian said that the investment management of its own portfolio will continue to be carried out by abrdn via its Singapore-based Asian Equity team.
"In order to succeed in the longer term in the DFM market, abrdn's view is that this part of the business would need to build much greater scale. With abrdn's strategy for its Personal vector focused on integrating the high-tech, high-touch model of interactive investor with financial planning, abrdn has concluded that another owner would be better placed to invest to deliver greater scale in the DFM business," abrdn explained.
abrdn left its annual dividend unchanged at 14.6 pence per share. It said it returned GBP600 million to shareholders through dividends and buyback last year. It expects to return a similar amount this year.
abrdn added: "We realised GBP800 million from stake sales in 2022. We are committed to returning a significant proportion of capital generated from further stake sales by way of share buybacks."
Looking ahead, it added: "[The] outlook for global markets remains uncertain and while this presents risks, we are taking actions to put our Investments business on a better footing through both focusing on our key areas of strength to drive revenue growth and simplifying the operating model. In the short term, additional headwinds arise from changing client demand and preferences.
"The benefits of diversification are already evident with our Adviser and Personal vectors on a stronger trajectory of growth, with more efficient operating margins. We will continue to be disciplined in our allocation of capital, investing in the business in order to drive growth and to support continued returns to shareholders."
Shares in abrdn were 0.4% higher at 214.30p each in London on Tuesday morning.
By Eric Cunha, Alliance News news editor
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