Abrdn Share Price Spiked 7.53% on Narrower FY 2023 Losses

The Abrdn PLC (LON: ABDN) spiked 7.53% after its full-year 2023 results were released. The investment firm’s net operating income decreased by 4% to £1,398 million due to the combination of outflows and unfavourable market conditions, somewhat offset by diversified revenue sources, including increased treasury income.

Adjusted operating expenses fell by 4% due to cost-cutting measures, largely negated by incorporating a full year of ii expenses. Without ii, expenses dropped by 9%. Adjusted operating profit was down 5% to £249 million, mainly attributable to the effects of ongoing net outflows and negative market trends, especially affecting high-yield equities.

IFRS pre-tax loss stood at £6 million (compared to a £612 million loss in 2022), with adjusting charges of £336 million that included £178 million losses from declines in the value of our listed investments and £152 million in restructuring and corporate transaction costs.

The cost/income ratio remained consistent at 82%. Assets under management and administration (AUMA) were slightly down by 1% to £494.9 billion. Positive market changes and ongoing net inflows in ii partially offset net outflows in Investments and Adviser.

Adjusted diluted earnings per share (EPS) rose to 13.9p (from 10.5p in 2022) thanks to increased adjusted post-tax profits and the impact of share repurchases in 2022 and 2023. It also reported £13.9 billion in net outflows during 2023 as many clients withdrew funds.

The firm’s transformation plan aims for a minimum annual cost saving of £150 million by the end of 2025, compared to 2023, with around 80% of these savings to benefit the Investments division. The strategy is designed to return Abrdn’s core Investments division to satisfactory profitability levels with anticipated job cuts of about 500 positions.

Stephen Bird, Chief Executive Officer of Abrdn plc, said: “Over the past three years, we have reshaped the business to fit the modern investment landscape. We now have content and distribution aligned to the products and services clients need, and we are better positioned for future growth. The investment industry faced further structural and macroeconomic challenges during 2023 with a ‘higher for longer' rate environment across developed economies, adding sustained pressure on most asset classes.”

Abrdn share price.

The Abrdn share price spiked 7.53% to trade at 173.82p from Monday’s closing price of 161.65p.

The firm’s transformation plan aims for a minimum annual cost saving of £150 million by the end of 2025, compared to 2023, with around 80% of these savings to benefit the Investments division. The strategy is designed to return Abrdn’s core Investments division to satisfactory profitability levels with anticipated job cuts of about 500 positions.