REG - abrdn PLC - Half-year Report - Part 3 of 3
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RNS Number : 2628Z abrdn PLC 06 August 2024
abrdn plc
Half Year Results 2024
Part 3 of 3
5. Supplementary information
5.1 Alternative performance measures APM
We assess our performance using a variety of measures that are not defined
under IFRS and are therefore termed alternative performance measures (APMs).
The APMs that we use may not be directly comparable with similarly named
measures used by other companies. We have presented below reconciliations from
these APMs to the most appropriate measure prepared in accordance with IFRS.
All APMs should be read together with the condensed consolidated income
statement, condensed consolidated statement of financial position and
condensed consolidated statement of cash flows, which are presented in the
Financial information section of this report, and related metrics. Adjusted
operating profit excludes certain items which are likely to be recurring such
as restructuring costs, amortisation of certain intangibles, dividends from
significant listed investments and the share of profit or loss from associates
and joint ventures.
Definition Purpose
Adjusted operating profit APM
Adjusted operating profit before tax is the Group's key APM. Adjusted Adjusted operating profit reporting provides further analysis of the results
operating profit includes the results of the Group's three businesses: reported under IFRS and the Directors believe it helps to give shareholders a
Investments, Adviser and ii along with Other business operations and corporate fuller understanding of the performance of the business by identifying and
costs. analysing adjusting items.
It excludes the Group's adjusted net financing costs and investment return. Segment reporting used in management information is reported to the level of
adjusted operating profit.
Adjusted operating profit also excludes the impact of the following items:
- Restructuring and corporate transaction expenses. Restructuring
includes the impact of major regulatory change.
- Amortisation and impairment of intangible assets acquired in business
combinations and through the purchase of customer contracts.
- Profit or loss arising on the disposal of a subsidiary, joint venture
or equity accounted associate.
- Change in fair value of/dividends from significant listed investments.
- Share of profit or loss from associates and joint ventures.
- Impairment loss/reversal of impairment loss recognised on investments
in associates and joint ventures accounted for using the equity method.
- Fair value movements in contingent consideration.
- Items which are one-off and, due to their size or nature, are not
indicative of the long-term operating performance of the Group.
Further details are included in Note 4.9 of the Financial information section.
Net operating revenue APM
Net operating revenue includes revenue we generate from asset management Net operating revenue is a component of adjusted operating profit and provides
charges (AMCs), platform charges, treasury income and other transactional the basis for reporting of the revenue yield financial ratio. Net operating
charges. AMCs are earned on products such as mutual funds, and are calculated revenue is also used to calculate the cost/income ratio.
as a percentage fee based on the assets held. Investment risk on these
products rests principally with the client, with our major indirect exposure
to rising or falling markets coming from higher or lower AMCs. Net operating
revenue is shown net of cost of sales, such as commissions and similar
charges.
Adjusted operating expenses APM
Adjusted operating expenses is a component of adjusted operating profit and Adjusted operating expenses is a component of adjusted operating profit and is
relates to the day-to-day expenses of managing our business. Adjusted used to calculate the cost/income ratio.
operating expenses excludes restructuring and corporate transaction expenses.
Adjusted operating expenses also excludes amortisation and impairment of
intangible assets acquired in business combinations and through the purchase
of customer contracts.
Adjusted profit before tax APM
In addition to the results included in adjusted operating profit above, Adjusted profit before tax is a key input to the adjusted earnings per share
adjusted profit measure.
before tax includes adjusted net financing costs and investment return.
Adjusted net financing costs and investment return APM
Adjusted net financing costs and investment return relates to the return from Adjusted net financing costs and investment return is a component of adjusted
the net assets of the shareholder business, net of costs of financing. This profit before tax.
includes the net assets in defined benefit staff pension plans and net assets
relating to the financing of subordinated liabilities.
Definition Purpose
Cost/income ratio APM
This is an efficiency measure that is calculated as adjusted operating This ratio is used by management to assess efficiency and reported to the
expenses divided by net operating revenue in the period. Board and executive leadership team.
Net operating revenue yield (bps) APM
The net operating revenue yield is calculated as annualised net operating The net operating revenue yield is a measure that illustrates the average
revenue (excluding performance fees, ii and revenue for which there are no margin being earned on the assets that we manage, or administer and excludes
attributable assets) divided by monthly average fee based assets. The ii the ii business.
business is excluded from the calculation of net operating revenue yield as
fees charged for this business are primarily from subscriptions and trading
transactions.
Adjusted diluted earnings per share APM
Adjusted diluted earnings per share is calculated on adjusted profit after Earnings per share is a commonly used financial metric which can be used to
tax. The weighted average number of ordinary shares in issue is adjusted measure the profitability and capital efficiency of a company over time. We
during the period to assume the conversion of all dilutive potential ordinary also calculate adjusted diluted earnings per share to illustrate the impact of
shares, such as share options granted to employees. adjusting items on the metric.
Details on the calculation of adjusted diluted earnings per share are set out This ratio is used by management to assess performance and reported to the
in Note 4.8 of the Financial information section. Board and executive leadership team.
Adjusted capital generation APM
Adjusted capital generation is part of the analysis of movements in IFPR These measures aim to show how adjusted profit contributes to regulatory
regulatory capital. Adjusted capital generation is calculated as adjusted capital, and therefore provides insight into our ability to generate capital
profit after tax less returns relating to pension schemes in surplus and that is deployed to support value for shareholders.
interest paid on other equity which do not benefit regulatory capital. It also
includes dividends from associates, joint ventures and significant listed
investments. At 30 June 2024, Phoenix is the only significant listed
investment.
Net capital generation APM
Net capital generation is calculated as adjusted capital generation less
restructuring and corporate transaction expenses (net of tax).
Adjusted diluted capital generation per share APM
Adjusted diluted capital generation per share is calculated as adjusted These ratios are measures used to assess performance for dividend paying
capital generation divided by the weighted average number of diluted ordinary capability.
shares outstanding.
Net diluted capital generation per share APM
Net diluted capital generation per share is calculated as net capital
generation divided by the weighted average number of diluted ordinary shares
outstanding.
Cash and liquid resources APM
Cash and liquid resources are IFRS cash and cash equivalents (netted down for The purpose of this measure is to demonstrate how much cash and invested
overdrafts), money market instruments and holdings in money market funds. It assets we hold and can be readily accessed.
also includes surplus cash that has been invested in liquid assets such as
high-quality corporate bonds, gilts and pooled investment funds. Seed capital
and co-investments are excluded. Cash collateral, cash held for charitable
funds and cash held in employee benefit trusts are excluded from cash and
liquid resources.
5.1.1 Adjusted operating profit and adjusted profit
Reconciliation of adjusted operating profit and adjusted profit to IFRS profit by component
The components of adjusted operating profit are net operating revenue and
adjusted operating expenses. These components provide a meaningful analysis of
our adjusted results. The table below provides a reconciliation of movements
between adjusted operating profit component measures and relevant IFRS terms.
A reconciliation of Net operating revenue to the IFRS item Revenue from
contracts with customers is provided in Note 4.4 of the Financial information
section.
IFRS term IFRS Presentation differences Adjusting Adjusted Adjusted profit term
items
profit
H1 2024 £m £m £m £m
Net operating revenue 667 - 667 Net operating revenue
Total administrative and other expenses (673) (4) 138 (539) Adjusted operating expenses(1)
(6) (4) 138 128 Adjusted operating profit
Net gains or losses on financial instruments and other income 85 (8) (35) 42 Adjusted net financing costs and investment return
Finance costs (12) 12 - - N/A
Profit on disposal of subsidiaries and other operations 88 - (88) - N/A
Profit on disposal of interests in joint ventures 11 - (11) - N/A
Share of profit or loss from associates and joint ventures 21 - (21) - N/A
Profit before tax 187 - (17) 170 Adjusted profit before tax
Total tax expense (16) - (25) (41) Tax on adjusted profit
Profit for the period 171 - (42) 129 Adjusted profit after tax
1. Adjusted operating expenses includes staff and other related costs of
£276m compared with IFRS staff costs and other employee-related costs of
£263m. The difference primarily relates to the inclusion of contractor,
temporary agency staff and recruitment and training costs of £8m (IFRS basis:
Reported within other administrative expenses) and gains on funds to hedge
deferred bonus awards of £2m (IFRS basis: Reported within other net gains on
financial instruments and other income) within staff and other related costs.
IFRS staff costs and other employee-related costs includes the benefit from
the net interest credit relating to the staff pension schemes of £7m
(Adjusted profit basis: Reported within adjusted net financing costs and
investment return).
IFRS term IFRS Presentation differences Adjusting Adjusted Adjusted profit term
items
profit
H1 2023 £m £m £m £m
Net operating revenue 721 - - 721 Net operating revenue
Total administrative and other expenses (764) (13) 183 (594) Adjusted operating expenses
(43) (13) 183 127 Adjusted operating profit
Net gains or losses on financial instruments and other income (118) 2 140 24 Adjusted net financing costs and investment return
Finance costs (12) 11 1 - N/A
Profit on disposal of subsidiaries and other operations - - - - N/A
Profit on disposal of interests in joint ventures - - - - N/A
Share of profit or loss from associates and joint ventures 4 - (4) - N/A
Loss before tax (169) - 320 151 Adjusted profit before tax
Total tax credit 24 - (48) (24) Tax on adjusted profit
Loss for the period (145) - 272 127 Adjusted profit after tax
Presentation differences primarily relate to amounts presented in a different
line item of the condensed consolidated income statement.
5.1.2 Cost/income ratio
H1 2024 H1 2023
Adjusted operating expenses (£m) (539) (594)
Net operating revenue (£m) 667 721
Cost/income ratio (%) 81 82
5.1.3 Net operating revenue yield (bps)
Average AUMA (£bn) Net operating revenue (£m) Net operating revenue yield (bps)
H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023
Institutional and Retail Wealth(1) 211.0 225.5 332 377 31.7 33.7
Insurance Partners 156.3 147.0 71 77 9.1 10.6
Investments 367.3 372.5 403 454 22.0 24.6
Adviser(2) 74.1 70.3 119 103 31.4 28.8
Eliminations(3) (7.4) (7.9) N/A N/A N/A N/A
Net operating revenue yield(3) 434.0 434.9 522 557 24.0 25.7
ii(3) 137 152
Performance fees(4) 3 7
Other(1) 5 5
Net operating revenue 667 721
Analysis of Institutional and Retail Wealth by asset class
Average AUM (£bn) Net operating revenue (£m) Net operating revenue yield (bps)
H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023
Equities 46.5 51.1 147 156 63.4 61.8
Fixed income 34.5 35.5 43 48 25.1 27.2
Multi-asset 24.8 27.7 26 34 21.5 24.8
Private equity 4.1 11.8 10 26 50.3 45.2
Real assets 37.8 40.3 79 88 41.9 43.9
Alternative investment solutions including private credit 23.7 13.4
25.8 17 16 12.9
Quantitative 18.3 15.7 3 3 3.5 3.2
Liquidity 19.2 19.7 7 6 7.8 6.5
Institutional and Retail Wealth 211.0 225.5 332 377 31.7 33.7
1. Net operating revenue for Finimize and our digital innovation group moved
from Investments to Other. Comparatives have been restated. Refer Note 4.3 of
the Financial information section for further details.
2. Adviser net operating revenue yield excludes revenue of £4m (H1 2023:
£3m) for which there are no attributable assets.
3. ii is excluded from the calculation of net operating revenue yield as fees
charged for this business are primarily from subscriptions and trading
transactions. ii includes financial planning revenue previously classified as
Personal Wealth, comparatives also include revenue relating to abrdn Capital.
Comparatives, including Eliminations have been restated.
4. Performance fees consist of Institutional and Retail Wealth £3m (H1 2023:
£6m) and Insurance Partners £nil (H1 2023: £1m).
5.1.4 Additional ii information
The tables below provide additional detail of ii(1) operational metrics.
ii operational metrics(1) H1 2024 H1 2023
Total customers at period end 422k 407k(2)
Customers holding a SIPP account 73.0k 62.4k(2)
Customer cash balances £5.9bn £5.5bn(2)
AUA per customer £163k £152k(2)
New customers 28.2k 15.1k
Daily average retail trading volumes 20.5k 16.7k
1. Excludes our financial planning business.
2. Comparative as at 31 December 2023.
5.1.5 Net capital generation
The table below provides a reconciliation of movements between adjusted profit
after tax and net capital generation. A reconciliation of adjusted profit
after tax to IFRS profit for the period is included earlier in this section.
H1 2024 H1 2023
£m £m
Adjusted profit after tax 129 127
Less net interest credit relating to the staff pension schemes (7) (16)
Less interest paid on other equity (6) (6)
Add dividends received from associates, joint ventures and significant listed 28 37
investments
Adjusted capital generation 144 142
Less restructuring and corporate transaction expenses (net of tax) (40) (92)
Net capital generation 104 50
Net interest credit relating to the staff pension schemes
The net interest credit relating to the staff pension schemes is the
contribution to adjusted profit before tax from defined benefit pension
schemes which are in surplus.
Dividends received from associates, joint ventures and significant listed investments
An analysis is provided below:
H1 2024 H1 2023
£m £m
Phoenix 28 27
HDFC Asset Management - 10
Dividends received from associates, joint ventures and significant listed 28 37
investments
The table below provides detail of dividend coverage on an adjusted capital
generation basis.
H1 2024 H1 2023
Adjusted capital generation (£m) 144 142
Interim dividend (£m) 130 137
Dividend cover on an adjusted capital generation basis (times) 1.11 1.04
5.1.6 Net diluted capital generation per share
A reconciliation of net capital generation to adjusted profit after tax is
included in 5.1.5 above.
H1 2024 H1 2023
Adjusted capital generation (£m) 144 142
Net capital generation (£m) 104 50
Weighted average number of diluted ordinary shares outstanding (millions)(1) - 1,816 1,949
Note 4.8
Adjusted diluted capital generation per share (pence) 7.9 7.3
Net diluted capital generation per share (pence) 5.7 2.6
1. In accordance with IAS 33, no share options and awards have been treated as
dilutive for the six months ended 30 June 2023 due to the loss attributable to
equity holders of abrdn plc in that period. Refer Note 4.8 of the Financial
information section for further details.
5.1.7 Cash and liquid resources
The table below provides a reconciliation between IFRS cash and cash
equivalents and cash and liquid resources. Seed capital and co-investments are
excluded.
H1 2024 FY 2023
£bn £bn
Cash and cash equivalents per the condensed consolidated statement of 1.4 1.2
financial position
Debt securities excluding third party interests(1) 0.6 0.7
Other(2) (0.2) (0.1)
Cash and liquid resources 1.8 1.8
1. Excludes £82m (FY 2023: £86m) relating to seeding.
2. Cash collateral, cash held for charitable funds and cash held in employee
benefit trusts are excluded from cash and liquid resources.
5.2 Investment performance
Definition Purpose
Investment performance
Investment performance is a measure of how investments are performing relative As an asset managing business this measure demonstrates our ability to
to a benchmark, target, or other comparator. The calculation covers funds that generate investment returns for our clients.
aim to outperform or track a benchmark/target, with certain assets excluded
where these measures of performance are not appropriate or expected, such as
certain private markets and execution only mandates. Benchmarks and targets
differ by fund and are defined in the relevant investment management agreement
or prospectus, as appropriate. The investment performance data is calculated
internally by abrdn to give users guidance on how we are delivering positive
investment outcomes for our clients. It is not intended for clients or
potential clients investing in our products as more specific information and
reporting is available for this purpose.
Investment performance has been aggregated using a money weighted average of
our assets under management. Calculations for investment performance are made
gross of fees except for those funds for which the stated comparator is net of
fees. The calculation uses a closing AUM weighting basis and is based on AUM
data available as at the relevant reporting date. As at 30 June 2024, 77% of
AUM is covered by this metric, performance is calculated relative to the
relevant comparator for each investment strategy on the basis of:
Assets ahead of the benchmark or target defined in the investment management
agreement or prospectus, as appropriate. As at 30 June 2024, this applies to
61% of the AUM.
Assets where the objective is to track an index are assessed based on being
within or above an applicable tolerance for the strategy. As at 30 June 2024,
this applies to 16% of the AUM.
( ) 1 year 3 years 5 years
% of AUM performing H1 2024 FY 2023 FY 2023 H1 2024 FY 2023 FY 2023 H1 2024 FY 2023 FY 2023
restated(1) restated(1) restated(1)
Equities 23 27 27 14 17 17 23 48 48
Fixed income 89 81 81 79 75 75 84 84 84
Multi-asset 65 12 12 27 15 15 37 22 22
Real assets 40 30 30 42 56 56 45 45 45
Alternatives 97 98 100 100 98 100 100 98 100
Quantitative 92 100 100 90 100 100 93 95 37
Liquidity 100 100 100 96 95 95 100 97 97
Total 70 55 44 54 51 42 58 58 52
% of AUM covered by metric 75% 61%
77%
1. The scope of the investment performance calculation has been extended to
include index tracker funds which were previously excluded from this metric.
2023 comparatives have been restated. We believe that this approach provides a
more representative view of our overall investment performance.
The extension to the scope of the investment performance calculation primarily
relates to alternatives and quantitative asset classes; the table below
provides additional detail highlighting the change to these asset classes:
( ) 1 year 3 years 5 years
% of AUM performing H1 2024 FY 2023 FY 2023 H1 2024 FY 2023 FY 2023 H1 2024 FY 2023 FY 2023
restated(1) restated(1) restated(1)
Alternatives 97 98 100 100 98 100 100 98 100
Active 100 97 100 100 97 100 100 97 100
Index 91 100 N/A 100 100 N/A 100 N/A N/A
Quantitative 92 100 100 90 100 100 93 95 37
Active 26 100 100 26 100 100 28 37 37
Index 99 100 N/A 100 100 N/A 99 99 N/A
5.3 Assets under management and administration and flows
Definition Purpose
AUMA
AUMA is a measure of the total assets we manage, administer or advise on The amount of funds that we manage, administer or advise directly impacts the
behalf of our clients. It includes assets under management (AUM), assets under level of net operating revenue that we receive.
administration (AUA) and assets under advice (AUAdv).
AUM is a measure of the total assets that we manage on behalf of individual
and institutional clients. AUM also includes fee generating assets managed for
corporate purposes.
AUA is a measure of the total assets we administer for clients through
platform products such as ISAs, SIPPs and general trading accounts.
AUAdv is a measure of the total assets we advise our clients on, for which
there is an ongoing charge.
Net flows
Net flows represent gross inflows less gross outflows or redemptions. Gross The level of net flows that we generate directly impacts the level of net
inflows are new funds from clients. Redemptions is the money withdrawn by operating revenue that we receive.
clients during the period. Cash dividends which are retained on the ii
platform are included in net flows for the ii business only. Cash dividends
are included in market movements for other parts of the Group including the
Investments and Adviser platform businesses. We consider that this different
approach is appropriate for the ii business as cash dividend payments which
are retained result in additional income for ii but are largely revenue
neutral for the rest of the Group.
5.3.1 Analysis of AUMA
Opening Gross inflows Redemptions Net flows Market Corporate Closing
AUMA at
and other movements
actions(4)
AUMA at
1 Jan 2024
30 Jun 2024
6 months ended 30 June 2024 £bn £bn £bn £bn £bn £bn £bn
Institutional 143.9 12.1 (9.2) 2.9 4.2 (7.0) 144.0
Retail Wealth 67.3 6.4 (8.9) (2.5) 1.9 - 66.7
Insurance Partners(1) 155.5 12.8 (14.2) (1.4) 4.5 - 158.6
Investments 366.7 31.3 (32.3) (1.0) 10.6 (7.0) 369.3
Adviser(2) 73.5 3.1 (5.1) (2.0) 3.5 - 75.0
ii(3) 66.0 7.1 (4.0) 3.1 3.8 - 72.9
Eliminations(5) (11.3) (1.1) 1.8 0.7 (0.7) - (11.3)
Total AUMA 494.9 40.4 (39.6) 0.8 17.2 (7.0) 505.9
Opening Gross inflows Redemptions Net flows Market Corporate Closing
AUMA at
and other movements
actions(6)
AUMA at
1 Jan 2023
30 Jun 2023
6 months ended 30 June 2023 £bn £bn £bn £bn £bn £bn £bn
Institutional 161.9 9.0 (13.9) (4.9) (5.2) - 151.8
Retail Wealth 69.3 6.8 (8.6) (1.8) (0.8) 0.5 67.2
Insurance Partners(1) 144.9 11.2 (11.0) 0.2 3.5 - 148.6
Investments 376.1 27.0 (33.5) (6.5) (2.5) 0.5 367.6
Adviser(2) 68.5 2.9 (3.5) (0.6) 1.4 2.5 71.8
ii(3) 67.1 5.6 (3.8) 1.8 1.0 (2.5) 67.4
Eliminations(5) (11.7) (1.3) 1.4 0.1 0.5 - (11.1)
Total AUMA 500.0 34.2 (39.4) (5.2) 0.4 0.5 495.7
1. Insurance Partners AUM at 30 June 2024 includes £157.5bn (31 December
2023: £154.4bn, 30 June 2023: £147.5bn) relating to Phoenix and £1.1bn (31
December 2023: £1.1bn, 30 June 2023: £1.1bn) of other AUM.
2. Includes Platform AUA at 30 June 2024 of £72.3bn (31 December 2023:
£70.9bn, 30 June 2023: £69.3bn).
3. Includes financial planning business AUA at 30 June 2024 of £4.1bn (31
December 2023: £4.3bn, 30 June 2023: £4.6bn).
4. Corporate actions in H1 2024 relates to the disposal of our
European-headquartered Private Equity business.
5. Eliminations remove the double count reflected in Investments, Adviser and
ii.
6. Corporate actions in H1 2023 relates to the transfer of the MPS business
from ii to Adviser in May 2023 of £2.5bn and £0.5bn relating to the
acquisition of Macquarie closed-end funds in March 2023.
5.3.2 Quarterly net flows
3 months to 3 months to 3 months to 3 months to 3 months to
30 Jun 24
31 Mar 24
31 Dec 23
30 Sep 23
30 Jun 23
15 months ended 30 June 2024 £bn £bn £bn £bn £bn
Institutional 0.6 2.3 (3.4) (3.6) (0.7)
Retail Wealth (0.9) (1.6) (2.4) (1.8) (0.8)
Insurance Partners (0.9) (0.5) 0.3 (1.6) 1.7
Investments (1.2) 0.2 (5.5) (7.0) 0.2
Adviser (1.1) (0.9) (1.0) (0.5) (0.5)
ii 1.9 1.2 0.5 0.6 1.1
Eliminations 0.4 0.3 0.3 0.2 0.2
Total net flows - 0.8 (5.7) (6.7) 1.0
5.4 Public markets and Alternatives investment capability
We have simplified and focused our investment capabilities on areas where we
have both the skill and the scale to capitalise on the key themes shaping the
market, through either public markets or alternative asset classes. This
analysis includes Institutional, Retail Wealth and Insurance Partners.
Analysis of AUM and net operating revenue
AUM (£bn) Net operating revenue (£m)(2)
H1 2024 H1 2023 H1 2024 H1 2023
Equities 66.8 73.4 158 184
Fixed income (including Liquidity)(1) 123.8 125.0 76 81
Multi-asset 33.0 30.0 40 43
Quantitative 76.2 58.3 13 8
Public markets 299.8 286.7 287 316
Real assets 41.3 43.7 85 96
Private credit 8.8 8.1 8 7
Alternative investment solutions 19.4 16.8 14 14
Private equity - 12.3 12 28
Alternatives 69.5 80.9 119 145
Total Investments 369.3 367.6 406 461
1. Total liquidity AUM at 30 June 2024 was £37.0bn (30 June 2023: £38.1bn).
Total liquidity net operating revenue was £12m (H1 2023: £12m).
2. Net operating revenue for Finimize and our digital Innovation group moved
from Investments to Other. Comparatives have been restated. Refer Note 4.3 of
the Financial information section for further details.
5.5 Institutional and Retail Wealth AUM
Detailed asset class split
Opening Gross inflows Redemptions Net flows Market Corporate actions(1) Closing
AUM at
and other movements
AUM at
1 Jan 2024
30 Jun 2024
6 months ended 30 June 2024 £bn £bn £bn £bn £bn £bn £bn
Developed markets equities 11.8 0.6 (1.2) (0.6) 0.6 - 11.8
Emerging markets equities 11.1 0.5 (1.5) (1.0) 0.5 - 10.6
Asia Pacific equities 16.3 1.2 (3.2) (2.0) 1.1 - 15.4
Global equities 8.5 0.7 (1.1) (0.4) 0.4 - 8.5
Total equities 47.7 3.0 (7.0) (4.0) 2.6 - 46.3
Developed markets credit 21.4 2.9 (1.7) 1.2 (0.5) - 22.1
Developed markets rates 3.3 0.2 (0.4) (0.2) (0.1) - 3.0
Emerging markets fixed income 9.8 0.9 (0.7) 0.2 0.1 - 10.1
Total fixed income 34.5 4.0 (2.8) 1.2 (0.5) - 35.2
Absolute return(2) - - - - - - -
Diversified growth/income 0.2 - - - 0.7 - 0.9
MyFolio 16.2 0.7 (1.4) (0.7) 0.9 - 16.4
Other multi-asset(2) 8.7 0.6 (0.7) (0.1) (0.9) - 7.7
Total multi-asset 25.1 1.3 (2.1) (0.8) 0.7 - 25.0
Total private equity 7.2 - - - (0.2) (7.0) -
UK real estate 15.9 0.3 (0.9) (0.6) 0.2 - 15.5
European real estate 13.6 0.2 - 0.2 (0.7) - 13.1
Global real estate 1.2 - (0.1) (0.1) (0.1) - 1.0
Real estate multi-manager 1.5 - (0.1) (0.1) - - 1.4
Infrastructure equity 6.1 0.1 (0.1) - (0.1) 6.0
Total real assets 38.3 0.6 (1.2) (0.6) (0.7) - 37.0
Total alternative investment solutions (including private credit) 24.0 0.7 (0.6) 0.1 2.9 - 27.0
Total quantitative 17.1 3.0 (0.9) 2.1 0.7 - 19.9
Total excluding liquidity 193.9 12.6 (14.6) (2.0) 5.5 (7.0) 190.4
Total liquidity 17.3 5.9 (3.5) 2.4 0.6 - 20.3
Total 211.2 18.5 (18.1) 0.4 6.1 (7.0) 210.7
1. Corporate actions in H1 2024 relate to the disposal of our
European-headquartered Private Equity business.
2. Other multi-asset includes opening AUM of £3.4bn, flows of nil, market and
other movements of £(0.1)bn and closing AUM of £3.3bn relating to assets
previously classified as Absolute return.
Opening Gross inflows Redemptions Net flows Market Corporate actions(1) Closing
AUM at
and other movements
AUM at
1 Jan 2023
30 Jun 2023
6 months ended 30 June 2023 £bn £bn £bn £bn £bn £bn £bn
Developed markets equities 11.1 0.6 (1.7) (1.1) 0.2 - 10.2
Emerging markets equities 12.5 0.4 (1.1) (0.7) (0.2) - 11.6
Asia Pacific equities 20.5 1.4 (2.5) (1.1) (1.5) - 17.9
Global equities 8.2 0.7 (0.9) (0.2) 0.2 0.4 8.6
Total equities 52.3 3.1 (6.2) (3.1) (1.3) 0.4 48.3
Developed markets credit 22.5 1.6 (2.4) (0.8) (0.2) 0.1 21.6
Developed markets rates 2.0 0.8 (0.4) 0.4 0.8 - 3.2
Emerging markets fixed income 11.3 0.7 (1.7) (1.0) (0.3) - 10.0
Total fixed income 35.8 3.1 (4.5) (1.4) 0.3 0.1 34.8
Absolute return(2) 1.4 0.1 (0.5) (0.4) (0.2) - 0.8
Diversified growth/income 0.3 - (0.1) (0.1) 0.1 - 0.3
MyFolio 15.6 0.8 (1.2) (0.4) 0.7 - 15.9
Other multi-asset(2) 11.0 0.4 (1.0) (0.6) (1.3) - 9.1
Total multi-asset 28.3 1.3 (2.8) (1.5) (0.7) - 26.1
Total private equity 12.3 0.1 (0.5) (0.4) (0.1) - 11.8
UK real estate 19.3 0.1 (0.7) (0.6) (2.2) - 16.5
European real estate 14.3 0.2 - 0.2 (0.9) - 13.6
Global real estate 1.6 0.1 (0.2) (0.1) (0.2) - 1.3
Real estate multi-manager 1.4 0.1 - 0.1 (0.3) - 1.2
Infrastructure equity 6.1 0.3 (0.1) 0.2 (0.1) - 6.2
Total real assets 42.7 0.8 (1.0) (0.2) (3.7) - 38.8
Total alternative investment solutions (including private credit) 24.0 1.0 (0.9) 0.1 (0.8) - 23.3
Total quantitative 15.0 1.5 (0.9) 0.6 0.2 - 15.8
Total excluding liquidity 210.4 10.9 (16.8) (5.9) (6.1) 0.5 198.9
Total liquidity 20.8 4.9 (5.7) (0.8) 0.1 - 20.1
Total 231.2 15.8 (22.5) (6.7) (6.0) 0.5 219.0
1. Corporate actions of £0.5bn in H1 2023 relates to the acquisition of
Macquarie closed-end funds in March 2023.
2. Other multi-asset includes opening AUM of £4.3bn, net outflows of £0.3bn,
market and other movements of £(0.2)bn and closing AUM of £3.8bn relating to
assets previously classified as Absolute return.
5.6 Investments AUM by geography
30 Jun 2024 31 Dec 2023
Institutional and Retail Wealth Insurance Total Institutional and Retail Wealth Insurance Partners Total
Partners
£bn £bn £bn £bn £bn £bn
UK 101.1 158.6 259.7 102.0 155.5 257.5
Europe, Middle East and Africa (EMEA) 50.1 - 50.1 51.9 - 51.9
Asia Pacific (APAC) 16.5 - 16.5 15.7 - 15.7
Americas 43.0 - 43.0 41.6 - 41.6
Total AUM 210.7 158.6 369.3 211.2 155.5 366.7
5.7 Surplus regulatory capital
The £1,544m indicative CET1 capital resources below includes a deduction to
allow for the declared interim dividend which will be paid in September 2024.
H1 2024 FY 2023
IFPR Group regulatory capital position £m £m
CET1 capital resources 1,544 1,466
Additional Tier 1 capital resources 207 207
Total Tier 1 capital resources 1,751 1,673
Tier 2 capital resources 483 539
Total regulatory capital resources 2,234 2,212
Total regulatory capital requirement (1,054) (1,054)
CET1 capital requirement(1) (590) (590)
Surplus CET1 regulatory capital 954 876
Own Funds Requirement 296 314
CET1 ratio (CET1 as % of Own Funds Requirement) 522% 467%
1. 56% of total regulatory capital requirement.
6. Glossary
Adjusted capital generation
Adjusted capital generation is part of the analysis of movements in IFPR
regulatory capital. Adjusted capital generation is calculated as adjusted
profit after tax less returns relating to pension schemes in surplus and
interest paid on other equity which do not benefit regulatory capital. It also
includes dividends from associates, joint ventures and significant listed
investments.
Adjusted net financing costs and investment return
Adjusted net financing costs and investment return is a component of adjusted
profit and relates to the return from the net assets of the shareholder
business, net of costs of financing. This includes the net assets in defined
benefit staff pension plans and net assets relating to the financing of
subordinated liabilities.
Adjusted operating expenses
Adjusted operating expenses is a component of adjusted operating profit and
relates to the day-to-day expenses of managing our business.
Adjusted operating profit
Adjusted operating profit before tax is the Group's key APM. Adjusted
operating profit includes the results of the Group's three businesses:
Investments, Adviser and ii, along with Other business operations and
corporate costs.
It excludes the Group's adjusted net financing costs and investment return.
Adjusted operating profit also excludes the impact of the following items:
- Restructuring and corporate transaction expenses. Restructuring
includes the impact of major regulatory change.
- Amortisation and impairment of intangible assets acquired in business
combinations and through the purchase of customer contracts.
- Profit or loss arising on the disposal of a subsidiary, joint venture
or equity accounted associate.
- Change in fair value of/dividends from significant listed investments.
- Share of profit or loss from associates and joint ventures.
- Impairment loss/reversal of impairment loss recognised on investments
in associates and joint ventures accounted for using the equity method.
- Fair value movements in contingent consideration.
- Items which are one-off and, due to their size or nature, are not
indicative of the long-term operating performance of the Group.
Adjusted profit before tax
In addition to the results included in adjusted operating profit above,
adjusted profit before tax includes adjusted net financing costs and
investment return.
Assets under management and administration (AUMA)
AUMA is a measure of the total assets we manage, administer or advise on
behalf of our clients. It includes assets under management (AUM), assets under
administration (AUA) and assets under advice (AUAdv). AUMA does not include
assets for associates and joint ventures.
AUM is a measure of the total assets that we manage on behalf of individual
and institutional clients. AUM also includes assets managed for corporate
purposes.
AUA is a measure of the total assets we administer for clients through our
Platforms.
AUAdv is a measure of the total assets we advise our clients on, for which
there is an ongoing charge.
Board
The Board of Directors of the Company.
Chief Operating Decision Maker
The executive leadership team.
Common Equity Tier 1 (CET1) Capital Coverage
CET1 capital coverage is calculated as CET1 capital resources as a percentage
of total regulatory capital requirement.
Company
abrdn plc.
Cost/income ratio
This is an efficiency measure that is calculated as adjusted operating
expenses divided by net operating revenue.
Director
A director of the Company.
Earnings per share (EPS)
EPS is a commonly used financial metric which can be used to measure the
profitability and strength of a company over time. EPS is calculated by
dividing profit by the number of ordinary shares. Basic EPS uses the weighted
average number of ordinary shares outstanding during the year. Diluted EPS
adjusts the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares, such as share options
awarded to employees.
Effective tax rate
Tax expense/(credit) attributable to equity holders' profit divided by profit
before tax attributable to equity holders' profits expressed as a percentage.
Executive leadership team (ELT)
Our ELT leads across our businesses and supporting functions globally and is
responsible for executing and monitoring progress on the delivery of our
business plans. The ELT also ensures we meet our obligations to our clients,
people, shareholders, regulators and partners.
Fair value through profit or loss (FVTPL)
FVTPL is an IFRS measurement basis permitted for assets and liabilities which
meet certain criteria. Gains or losses on assets or liabilities measured at
FVTPL are recognised directly in the income statement.
FCA
Financial Conduct Authority of the United Kingdom.
Group or abrdn
Relates to the Company and its subsidiaries.
Internal Capital Adequacy and Risk Assessment (ICARA)
The ICARA is the means by which the Group assesses the levels of capital and
liquidity that adequately support all of the relevant current and future risks
in its business.
International Financial Reporting Standards (IFRS)
International Financial Reporting Standards are accounting standards issued by
the International Accounting Standards Board (IASB).
Investment Firms Prudential Regime (IFPR)
The Investment Firms Prudential Regime is the FCA's new prudential regime for
MiFID investment firms. The regime came into force on 1 January 2022.
Investment performance
Investment performance is a measure of how investments are performing relative
to a benchmark, target, or other comparator. The calculation covers funds that
aim to outperform or track a benchmark/target, with certain assets excluded
where these measures of performance are not appropriate or expected, such as
certain private markets and execution only mandates. Benchmarks and targets
differ by fund and are defined in the relevant investment management agreement
or prospectus, as appropriate. The investment performance data is calculated
internally by abrdn to give users guidance on how we are delivering positive
investment outcomes for our clients. It is not intended for clients or
potential clients investing in our products as more specific information and
reporting is available for this purpose.
Investment performance has been aggregated using a money weighted average of
our assets under management. Calculations for investment performance are made
gross of fees except for those funds for which the stated comparator is net of
fees. The calculation uses a closing AUM weighting basis and is based on AUM
data available as at the relevant reporting date. As at 30 June 2024, 77% of
AUM is covered by this metric, performance is calculated relative to the
relevant comparator for each investment strategy on the basis of:
- Assets ahead of the benchmark or target defined in the investment
management agreement or prospectus, as appropriate. This applies to 61% of the
AUM.
- Assets where the objective is to track an index are assessed based on
being within or above an applicable tolerance for the strategy. This applies
to 16% of the AUM.
Market Disclosure
This IFPR disclosure complements the Own funds requirement and Own funds
threshold requirement with the aim of improving market discipline by requiring
companies to publish certain details of their risks, capital and risk
management. Relevant disclosures are made in the abrdn plc consolidated annual
report and accounts and alongside the accounts of the Group's individual
IFPR-regulated entities, all of which can be found on the abrdn plc Group's
website.
Net capital generation
Net capital generation is calculated as adjusted capital generation less
restructuring and corporate transaction expenses (net of tax).
Net flows
Net flows represent gross inflows less gross outflows or redemptions. Gross
inflows are new funds from clients. Redemptions is the money withdrawn by
clients during the period. Cash dividends which are retained on the ii
platform are included in net flows for the ii business only. Cash dividends
are included in market movements for other parts of the group including the
Investments and Adviser platform businesses. We consider that this different
approach is appropriate for the ii business as cash dividend payments which
are retained result in additional income for ii, but are largely revenue
neutral for the rest of the group.
Net operating revenue
Net operating revenue is a component of adjusted operating profit and includes
revenue we generate from asset management charges (AMCs), platform charges,
treasury income and other transactional charges. AMCs are earned on products
such as mutual funds, and are calculated as a percentage fee based on the
assets held. Investment risk on these products rests principally with the
client, with our major indirect exposure to rising or falling markets coming
from higher or lower AMCs. Treasury income is the interest earned on cash
balances less the interest paid to customers. Net operating revenue is shown
net of fees, cost of sales, commissions and similar charges. Cost of sales
include revenue from fund platforms which is passed to the product provider.
Net operating revenue yield (bps)
The net operating revenue yield is a measure that illustrates the average
margin being earned on the assets that we manage, or administer and excludes
the ii business. It is calculated as annualised net operating revenue
(excluding performance fees, ii and revenue for which there are no
attributable assets) divided by monthly average fee based assets. The ii
business is excluded from the calculation of net operating revenue yield as
fees charged for this business are primarily from subscriptions and trading
transactions.
Own Funds Requirement
Under IFPR, the Own Funds Requirement is the higher of the permanent minimum
capital requirement, the fixed overhead requirements, and the K-factor
requirement. The K-factor requirement is the sum of: Risk-to-Client,
Risk-to-Market, and Risk-to-Firm K-factors.
Own Funds Threshold Requirement
Under IFPR, the Own Funds Threshold Requirement is the higher of Own funds
required on an ongoing basis and Own funds required on a wind-down basis. The
firm identifies and measures risks of harm and determines the degree to which
systems and controls alone mitigate those risks of harm (or risks of
disorderly wind-down). Any additional own funds needed, over and above the Own
funds requirement, to cover this identified residual risk is held under the
Own Funds Threshold Requirement.
Phoenix or Phoenix Group
Phoenix Group Holdings plc or Phoenix Group Holdings plc and its subsidiaries.
Significant listed investments
At 30 June 2024, Phoenix is the only significant listed investment. Our
remaining stakes in HDFC Asset Management and HDFC Life were sold during H1
2023. Fair value movements and dividend income relating to these investments
are treated as adjusting items for the purpose of determining the Group's
adjusted profit.
Subordinated liabilities
Subordinated liabilities are debts of a company which, in the event of
liquidation, rank below its other debts but above share capital. The 5.25%
Fixed Rate Reset Perpetual Subordinated Contingent Convertible Notes issued by
the Company in December 2021 are classified as other equity as no contractual
obligation to deliver cash exists.
7. Shareholder information
Registered office
1 George Street
Edinburgh
EH2 2LL
Scotland
Company registration number: SC286832
Secretary: Paul McKenna
Registrar: Equiniti
Auditors: KPMG LLP
Solicitors: Slaughter and May
Brokers: JP Morgan Cazenove, Goldman Sachs
Shareholder services
We offer a wide range of shareholder services. For more information, please:
- Contact our registrar, Equiniti, who manage this service for us. Their
full details can be found on the inside back cover.
- For shareholder services call: +44 (0)371 384 2464*
- Visit our share portal at www.abrdnshares.com
(http://www.abrdnshares.com)
* Calls are monitored/recorded to meet regulatory obligations and for
training and quality purposes. Call charges will vary.
Dividends
The Board has declared an interim dividend for 2024 of 7.3 pence per share which will be paid on 24 September 2024.
A Dividend Reinvestment Plan (DRIP) is provided by Equiniti Financial Services Limited. The DRIP enables the Company's shareholders to elect to have their cash dividend payments used to purchase the Company's shares. More information can be found at www.abrdnshares.com
Sign up for Ecommunications
Signing up means:
- You'll receive an email when documents like the annual report and
accounts, Half year results and AGM guide are available on our website.
- Voting instructions for the Annual General Meeting will be sent to you
electronically.
Set up a share portal account
Having a share portal account means you can:
- Manage your account at a time that suits you.
- Download your documents when you need them.
To find out how to sign up, visit www.abrdnshares.com
Preventing unsolicited mail
By law, the Company has to make certain details from its share register
publicly available. As a result it is possible that some registered
shareholders could receive unsolicited mail, emails or phone calls. You could
also be targeted by fraudulent 'investment specialists', clone firms or
scammers posing as government bodies e.g. HMRC, FCA. Frauds are becoming much
more sophisticated and may use real company branding, the names of real
employees or email addresses that appear to come from the company. If you get
a social or email message and you're unsure if it is from us, you can send it
to emailscams@abrdn.com (mailto:emailscams@abrdn.com) and we'll let you know.
You can also check the FCA warning list and warning from overseas regulators,
however, please note that this is not an exhaustive list and do not assume
that a firm is legitimate just because it does not appear on the list as
fraudsters frequently change their name and it may not have been reported yet.
www.fca.org.uk/consumers/unauthorised-firms-individuals
www.iosco.org/investor_protection/?subsection=investor_alerts_portal
(http://www.iosco.org/investor_protection/?subsection=investor_alerts_portal)
You can find more information about share scams at the Financial Conduct
Authority website www.fca.org.uk/consumers/scams
If you are a certificated shareholder, your name and address may appear on a
public register. Using a nominee company to hold your shares can help protect
your privacy. You can transfer your shares into the Company-sponsored nominee
- the abrdn Share Account - by contacting Equiniti, or you could get in touch
with your broker to find out about their nominee services. If you want to
limit the amount of unsolicited mail you receive generally, please visit
www.mpsonline.org.uk
Financial calendar
Half year results 2024 6 August
Ex-dividend date for 2024 interim dividend 15 August
Record date for 2024 interim dividend 16 August
Last date for DRIP elections for 2024 4 September
interim dividend
Dividend payment date for 2024 interim dividend 24 September
Analysis of registered shareholdings at 30 June 2024
Range of shares Number of holders % of total holders Number of shares % of total shares
1-1,000 54,949 66.20 21,827,316 1.19
1,001-5,000 23,735 28.60 50,104,916 2.72
5,001-10,000 2,653 3.20 17,987,113 0.98
10,001-100,000 1,347 1.62 29,841,108 1.62
(#)100,001+ 315 0.38 1,720,981,031 93.49
Total 82,999 100.00 1,840,741,484 100.00
# These figures include the Company-sponsored nominee - the abrdn Share
Account - which had 853,071 participants holding 621,626,110 shares.
8. Forward-looking statements
This document may contain certain 'forward-looking statements' with respect to
the financial condition, performance, results, strategies, targets (including
ESG targets), objectives, plans, goals and expectations of the Company and its
affiliates. These forward-looking statements can be identified by the fact
that they do not relate only to historical or current facts.
Forward-looking statements are prospective in nature and are not based on
historical or current facts, but rather on current expectations, assumptions
and projections of management of the abrdn Group about future events, and are
therefore subject to known and unknown risks and uncertainties which could
cause actual results to differ materially from the future results expressed or
implied by the forward-looking statements.
For example but without limitation, statements containing words such as 'may',
'will', 'should', 'could', 'continues', 'aims', 'estimates', 'projects',
'believes', 'intends', 'expects', 'hopes', 'plans', 'pursues', 'ensure',
'seeks', 'targets' and 'anticipates', and words of similar meaning (including
the negative of these terms), may be forward-looking. These statements are
based on assumptions and assessments made by the Company in light of its
experience and its perception of historical trends, current conditions, future
developments and other factors it believes appropriate.
By their nature, all forward-looking statements involve risk and uncertainty
because they are based on information available at the time they are made,
including current expectations and assumptions, and relate to future events
and/or depend on circumstances which may be or are beyond the Group's control,
including, among other things: UK domestic and global political, economic and
business conditions (such as the UK's exit from the EU, the ongoing conflict
between Russia and Ukraine and the ongoing conflicts in the Middle East);
market related risks such as fluctuations in interest rates and exchange
rates, and the performance of financial markets generally; the impact of
inflation and deflation; the impact of competition; the timing, impact and
other uncertainties associated with future acquisitions, disposals or
combinations undertaken by the Company or its affiliates and/or within
relevant industries; experience in particular with regard to mortality and
morbidity trends, lapse rates and policy renewal rates; the value of and
earnings from the Group's strategic investments and ongoing commercial
relationships; default by counterparties; information technology or data
security breaches (including the Group being subject to cyberattacks);
operational information technology risks, including the Group's operations
being highly dependent on its information technology systems (both internal
and outsourced); natural or man-made catastrophic events; the impact of
pandemics; climate change and a transition to a low-carbon economy (including
the risk that the Group may not achieve its relevant ESG targets); exposure to
third-party risks including as a result of outsourcing; the failure to attract
or retain necessary key personnel; the policies and actions of regulatory
authorities and the impact of changes in capital, solvency or accounting
standards, ESG disclosure and reporting requirements, and tax and other
legislation and regulations (including changes to the regulatory capital
requirements) that the Group is subject to in the jurisdictions in which the
Company and its affiliates operate. As a result, the Group's actual future
financial condition, performance and results may differ materially from the
plans, goals, objectives and expectations set forth in the forward-looking
statements.
Neither the Company, nor any of its associates, directors, officers or
advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward-looking
statements in this document will actually occur. Persons receiving this
document should not place reliance on forward-looking statements. All
forward-looking statements contained in this document are expressly qualified
in their entirety by the cautionary statements contained or referred to in
this section. Each forward-looking statement speaks only as at the date of the
particular statement. Neither the Company nor its affiliates assume any
obligation to update or correct any of the forward-looking statements
contained in this document or any other forward-looking statements it or they
may make (whether as a result of new information, future events or otherwise),
except as required by law. Past performance is not an indicator of future
results and the results of the Company and its affiliates in this document may
not be indicative of, and are not an estimate, forecast or projection of, the
Company's or its affiliates' future results.
Contact us
Got a shareholder question? Contact our shareholder services team.
UK and overseas
phone +44 (0)371 384
2464*
email
questions@abrdnshares.com (mailto:questions@abrdnshares.com)
visit
www.abrdnshares.com (http://www.abrdnshares.com/)
mail abrdn
Shareholder Services
Aspect House
Spencer Road
Lancing, West Sussex
BN99 6DA, United Kingdom
* Calls are monitored/recorded to meet regulatory obligations and for training
and quality purposes. Call charges will vary.
Extensive information, including many answers to frequently asked questions,
can also be found online at www.abrdnshares.com
Please remember that the value of shares can go down as well as up and you may
not get back the full amount invested or any income from it. All figures and
share price information have been calculated
as at 30 June 2024 (unless otherwise indicated).
This document has been published by abrdn plc for information only. It is
based on our understanding as at August 2024 and does not provide financial or
legal advice.
abrdn plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh
EH2 2LL.
www.abrdn.com (http://www.abrdn.com/) © 2024 abrdn, images reproduced under
licence. All rights reserved.
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