REG - abrdn PLC - Final Results

AberdeenAnnouncement

01/03/2022 07:16

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220301:nRSA1204Da&default-theme=true

RNS Number : 1204D  abrdn PLC  01 March 2022

abrdn
plc

Full year results
2021
 

Part 1 of 8

1 March 2022

The abrdn plc Annual report and accounts 2021 (Annual report 2021) has been
published today and is available at www.abrdn.com/annualreport

This summary contains information that has been extracted from the Annual
report 2021. Please refer to the forward-looking statement disclaimer on page
284 of the Annual report 2021.

 

Delivering on our strategy for growth

Strong progress towards our financial objectives

Disciplined approach to capital management to drive growth and shareholder
returns

Stephen Bird, Chief Executive Officer abrdn plc, commented:

 

"This was our reset year. In 2021 we set out a clear strategy for how we will
create long-term sustainable growth and arrest the decline in revenue. Today I
am very pleased to report strong progress for this first year of our three
year plan. We are delivering on our strategy for growth.

 

"For the first time since the merger, we have reported an increase in revenue
for the full year - as well as an improved cost/income ratio of 79%, and a 47%
increase in adjusted operating profit. We remain focused on delivering
compound annual revenue growth in the high single figures. This will enable us
to exit 2023 with a cost/ income ratio of around 70%.

 

"Strategically, we have made huge strides forward. We have simplified and
extended the relationship with our largest client, Phoenix. We have
successfully rebranded as abrdn which gives us a unified global identity and
purpose. We have divested non-core assets and built out our capabilities
across our three vectors, including in private markets and digital content.
More broadly, we have sharpened the focus of our Investments business to
identify the key areas where we have a true competitive advantage. And, late
in the year, we announced our proposed acquisition of interactive investor - a
transaction that transforms our Personal vector, diversifies group revenues
and significantly expands our client reach. As stated when we announced, this
acquisition is expected to be double-digit earnings accretive in the first
full financial year following completion.

 

"Clearly, markets are volatile right now. Geopolitical risk and inflation are
rising and there remains an element of uncertainty about the pace at which
different economies are recovering from the impacts of the COVID-19 pandemic.
We benefit from a strong capital position enabling us both to continue to
invest in the business and return money to shareholders. This balance
underpins our ability to create long-term value for shareholders."

 

Key indicators

                                           2021       2020        Change
 Financial indicators
 Fee based revenue                         £1,515m    £1,425m     6%
 Cost/income ratio                         79%        85%         6ppts
 Adjusted operating profit                 £323m      £219m       47%
 Adjusted capital generation               £366m      £262m       40%
 IFRS profit before tax                    £1,115m    £838m
 Adjusted diluted earnings per share       13.7p      8.8p(1)     56%
 Diluted earnings per share                46.0p      37.9p
 Full year dividend per share              14.6p      14.6p

 Business indicators
 Gross flows                               £72.3bn    £74.3bn     (3%)
 Net flows                                 (£6.2bn)   (£29.0bn)
 Net flows excluding liquidity and LBG(2)  (£3.2bn)   (£12.3bn)
 AUMA                                      £542bn     £535bn      1%
 Investment performance  - 3-year(3)       67%        66%

Key points

Financial strength underpins delivery of our strategy

·      Fee based revenue 6% higher and adjusted operating profit 47%
higher with strong growth across all three vectors.

·      Delivered improved operating leverage with cost/income ratio of
79%, benefitting from a 1% reduction in adjusted operating expenses due to
focus on cost management.

·      Achieved targeted £400m of annualised synergies.

·      IFRS profit before tax of £1,115m, primarily reflecting the
recognition of the full market value of our residual stake in HDFC Asset
Management and the gain on sale of the c5% stake in September 2021.

·      Adjusted diluted EPS of 13.7p, 56% higher than 2020.

·      Adjusted capital generation increased by 40% to £366m,
reflecting strong profit performance.

·      Disciplined approach to capital management delivered surplus
regulatory capital of £1.8bn (on an IFPR basis) with £1.6bn of capital
generated and £0.8bn deployed in driving growth and returns to shareholders.

·      Full year dividend of 14.6p in line with our dividend policy,
1.18x covered by adjusted capital generation.

·      Positive trend in H1 2021 net outflows (excluding liquidity and
LBG tranche withdrawals) continued in H2 2021, resulting in net outflows of
(£3.2bn) for the year compared with (£12.3bn) in 2020.

·      AUMA of £542bn up 1% reflecting positive market movements, the
impact of corporate actions and net flows.

·      Net outflows position in Investments improved to (£7.6bn)
(excluding liquidity and LBG) from (£15.8bn) in 2020.

·      Institutional and Wholesale net outflows (excluding liquidity)
improved to (£2.1bn) from (£8.9bn) in 2020 largely due to lower net outflows
in equities and net inflows in fixed income and real assets.

·      Adviser and Personal vectors more than doubled net inflows to
£3.9bn and £0.6bn, respectively, with record AUM of £8.9bn in
discretionary investment management.

·      3-year investment performance stable at 67% of AUM above
benchmark.

 

Delivering on our client-led growth strategy

·      Launched unifying abrdn brand uniting our entire operations and
culture.

·      Simplified and extended strategic partnership with Phoenix,
bringing commercial and financial benefits.

·      Completed migration of over £460bn of AUM onto single global
investment platform.

·      In Asia, strengthened the leadership team and tightened our focus
to drive growth, delivered 13% growth in revenue.

·      Strong performance in real assets franchise with AUM up 25% to
£48bn. Extended capabilities through acquisition of majority stake in Tritax,
a leading European logistics real estate investor, which has increased its AUM
by 12% to £6.5bn since acquisition.

·      Built on our established strength in sustainable investing
through launch of four climate change thematic funds and conversion of 23
SICAV funds to comply with SFDR Article 8 & 9.

·      Won over £1bn assets through our pensions and insurance
solutions expertise within Investments.

·      In Adviser, maintained our no.1 position for AUA and gross flows
in UK adviser market and continued to rollout improvements in our platform
capabilities and service under our Adviser Experience Programme.

·      Personal vector succeeded in delivering planned turnaround,
achieving adjusted operating profit of £8m, and discretionary investment
management reporting its best ever year.

·      Transforming the Personal vector through the proposed acquisition
of interactive investor, the UK's leading subscription-based investment
platform, for £1.49bn which will diversify our revenue streams and add
significant client reach.  Acquisition expected to be double-digit earnings
accretive(4) compared to standalone abrdn earnings  in first full financial
year following completion.

·      Invested in expanding our digital and content capabilities
through acquisition of investing insights platform, Finimize.

·      Continued to simplify the business with sales of Parmenion,
Nordics real estate business, and two US private equity businesses, and
exiting from the Indonesian market.

 

Shaping the business for the future

·      Our client-led growth strategy is designed to diversify our
revenue streams by geography and client segment and lower the impact of market
volatility on revenue.

·      Maintain our outlook for high single digit three year revenue
CAGR over 2020-2023.

·      Within Investments vector, focus on rationalisation,
simplification and increased streamlining to accelerate efficiency gains and
create operating leverage.

·      Target to exit 2023 at cost/income ratio of c70%.

·      Maintain sustainable dividend  policy of 14.6p per annum with
the intention of growing the dividend in line with our assessment of medium
term profit growth, once the dividend is 1.5x covered by adjusted capital
generation.

·      Continued disciplined approach to capital allocation with a focus
on building long-term sustainable value and delivering shareholder returns.

·      Commitment to shareholder returns demonstrated by intention to
return c£0.3bn net proceeds from sale of 4% stake in Phoenix to shareholders,
method and timing to be announced as soon as practicable.

 

Notes:

 

(1) Adjusted diluted earnings per share excludes the share of profit from
associates and joint ventures. Comparatives have been restated.

(2) Excluding Institutional and Wholesale liquidity net outflows of (£3.0bn)
(2020: £9.2bn inflows) and LBG tranche withdrawals of £nil
(2020: £25.9bn).

(3 )Percentage of AUM above benchmark over three years.

(4 )In percentage terms, based on adjusted diluted earnings per share.

 

Media

A conference call for the media will take place at 07:45am GMT on 1 March
2022. To access the conference call, you will need to pre-register at
https://cossprereg.btci.com/prereg/key.process?key=PWUUF4ENH
(https://cossprereg.btci.com/prereg/key.process?key=PWUUF4ENH)

 

Institutional investors and analysts

A presentation for analysts and investors will take place via webcast at
08:45am (GMT) on 1 March 2022. To view the webcast live please go to
www.abrdn.com/corporate/investors. There is also the facility to join the
presentation and subsequent Q&A session via a conference call.

 

FOR A PDF VERSION OF THE FULL ANNUAL REPORT AND ACCOUNTS, PLEASE CLICK HERE

 

http://www.rns-pdf.londonstockexchange.com/rns/1204D_1-2022-2-28.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1204D_1-2022-2-28.pdf)

 

For further information please contact:

 

 Institutional equity investors and analysts
 Catherine Nash                               07798 518657

 James Harley                                 07775 337754

 Media
 Andrea Ward                                  07876 178696

 Iain Dey (Edelman Smithfield)                07976 295906

 Latika Shah (Edelman Smithfield)             07950 671948

 Retail equity investors
 Equiniti*                                    0371 384 2464

 Debt investors and analysts
 Graeme McBirnie                              01313 727760

 

 

* Calls may be monitored and/or recorded. Call charges will vary

 

abrdn plc's LEI Code is 0TMBS544NMO7GLCE7H90

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  FR DXGDDIDDDGDI