abrdn Reports Mixed Results: Profit Up, Revenue Down in 2024
Why we think this is neutral
abrdn's 2024 results present a mixed picture. While adjusted operating profit increased by 2% to £255m and profit after tax grew significantly, revenue saw a substantial decline from £1,361m to £667m. This unusual combination of lower revenue but higher profit suggests major structural changes or significant cost-cutting measures. The company showed improvements in customer growth and investment performance in some areas, particularly in the interactive investor (ii) business. However, challenges remain in the Adviser and Investments segments. The ongoing transformation programme appears to be yielding cost savings, but its full impact on long-term growth is yet to be seen. The company's share price trading near its 52-week high indicates investor optimism, but this could also mean limited upside potential. While there are positive signs of momentum in H2 2024, the asset management industry continues to face headwinds, and abrdn still needs to demonstrate sustained growth across all its business segments.
Key Points
- Adjusted operating profit increased 2% to £255m in 2024
- Revenue declined from £1,361m in 2023 to £667m in 2024
- Profit after tax grew to £171m from £124m in 2023
- Interactive investor (ii) business reported strong growth in customer numbers and net flows
- Adviser business faced challenges with reduced customer numbers and net outflows
- Investments business improved new business win rates and reduced redemptions
- Transformation programme delivered £70m of in-year cost savings, exceeding targets
- Share price trading near 52-week high at 162p
- Ongoing focus on streamlining operations and positioning for future growth
- Challenges remain in returning Adviser and Investments segments to growth
Summary
abrdn's 2024 results reveal a complex financial picture. Adjusted operating profit rose 2% to £255m, and profit after tax increased to £171m from £124m in 2023. However, revenue declined significantly from £1,361m to £667m. The interactive investor (ii) business showed strong growth in customer numbers and net flows, while the Adviser business faced challenges with reduced customer numbers. The Investments business saw improvements in new business win rates and reduced redemptions. The company's transformation programme delivered £70m of in-year cost savings, exceeding initial targets. Despite industry headwinds, abrdn's share price remains near its 52-week high, suggesting investor confidence. The company maintains its focus on streamlining operations and positioning for future growth, although challenges persist in returning the Adviser and Investments segments to growth trajectories.