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On August 6, 2024, Abrdn PLC (LSE:ABDN) announced a notable increase in its assets under management and administration for the first half of 2024. The Edinburgh-based investment firm reported a 2.3% rise, bringing the total to £505.9 billion from £494.4 billion the previous year. This increase is attributed to positive market movements and improved fund flows. The firm achieved net inflows of £800 million, a turnaround from the £5.2 billion outflows experienced in the same period last year.
Profit and Revenue Developments
Abrdn shifted from a pretax loss of £169 million in the previous year to a pretax profit of £187 million. This profit includes an £88 million gain from the sale of its European-headquartered private equity business and reduced losses of £15 million from listed stakes, compared to £181 million in the previous year. However, net operating revenue declined by 7.5%, falling to £667 million from £721 million.
Cost Reduction and Savings
The company reported a 13% reduction in adjusted operating expenses, which decreased to £372 million from £427 million. This reduction is attributed to cost-saving measures across staff and non-staff expenses. abrdn is on track to achieve £150 million in annualized cost savings by the end of 2025.
Current Market Conditions and Future Outlook
Despite the positive financial results, abrdn cautioned about the uncertain outlook for global financial markets. The firm noted that while there have been improvements in market conditions, the global financial environment remains volatile. The company emphasized its progress in addressing this uncertainty and its focus on returning to profitable and sustainable growth.
Challenges and Strategic Response
The firm reported that outflows in its Adviser segment remain elevated, totaling £2.0 billion in the first half of 2024, up from £600 million a year prior. abrdn is actively working to mitigate these outflows through strategic measures. Interim Chief Executive Officer Jason Windsor highlighted the firm’s efforts to enhance efficiency and strengthen its propositions to support future growth.
Company Perspective
Windsor expressed optimism about the firm’s progress, noting that the company is making strides towards efficiency and growth. He emphasized that abrdn’s three core businesses are well-positioned in attractive markets and have potential for further expansion.
