abrdn Reports Improved Profitability Despite Revenue Decline in 2024 Results
Why we think this is neutral
abrdn's 2024 results present a mixed picture. On the positive side, the company reported a 2% increase in adjusted operating profit to £255m and a significant improvement in IFRS profit before tax to £251m from a loss in 2023. The interactive investor business showed strong growth with an 8% increase in customer numbers. However, these positives are balanced against a 6% decline in adjusted net operating revenue to £1,321m. The company maintains a robust cash position of £1.7bn and has made progress in its transformation programme, delivering over £100m in annualised cost savings. Looking ahead, while the company expects some headwinds from interest rate reductions and slight margin pressure in its Investments business, it remains cautiously optimistic about future growth opportunities. The valuation appears reasonable with a P/E ratio of around 10.8. Given the balance of positive developments and ongoing challenges, a neutral sentiment seems appropriate, acknowledging the company's resilience in a complex market environment.
Key Points
- Adjusted operating profit up 2% to £255m
- IFRS profit before tax improved to £251m from a loss of £6m in 2023
- Adjusted net operating revenue down 6% to £1,321m
- interactive investor customer numbers grew 8% to 439k
- Over £100m annualised cost savings delivered through transformation programme
- Robust cash position maintained at £1.7bn
- Full year dividend maintained at 14.6p per share
- Cautiously optimistic outlook with expected headwinds from interest rate reductions in 2025
Summary
abrdn plc reported mixed results for 2024, with improved profitability despite revenue challenges. Adjusted operating profit increased by 2% to £255m, while adjusted net operating revenue decreased by 6% to £1,321m. The company's interactive investor business showed strong growth with an 8% increase in customer numbers to 439k. abrdn maintained a robust cash position of £1.7bn and made significant progress in its transformation programme, delivering over £100m in annualised cost savings. The company expects some headwinds from interest rate reductions in 2025 but remains cautiously optimistic about growth opportunities. With a P/E ratio of around 10.8, the current valuation appears reasonable. The company maintained its full year dividend at 14.6p per share.