Abrdn beats estimates, shares jump

Investing.com -- Shares of Abrdn (LON:ABDN) jumped on Tuesday after the company reported better-than-expected half-year results. 

At 3:43 am (0743 GMT), Abrdn was trading 4.3% higher at £166.85

The asset manager reported an adjusted operating profit of £128 million, surpassing the consensus estimate of £118 million and RBC Capital Markets’ expectation of £119 million. 

The stronger profit was attributed to better management of costs, with the cost-income ratio (CIR) coming in at 81%, below the consensus of 82.2%.

The company reported net inflows of £0.8 billion, beating the consensus forecast of -£0.9 billion. 

This positive variance was partly driven by net inflows into quantitative and fixed income assets, which mitigated outflows from equities. 

Net flows excluding liquidity were -£2.0 billion, an improvement over the consensus expectation of -£3.6 billion.

Adjusted capital generation was reported at £144 million, beating the consensus estimate of £133 million and RBC’s projection of £134 million. This resulted in a dividend per share (DPS) of 7.3p, in line with expectations and covered 1.11 times by capital generation.

Abrdn's CET1 capital surplus increased to £954 million from £876 million at FY23, bolstered by the disposal of its European private equity business and Virgin Money (LON:VMUK) joint venture.

Revenues slightly exceeded expectations, with a revenue yield of 24.0 basis points, consistent with RBC Capital Markets’ forecast. The lower CIR reflected improved cost management, which was a key driver of the higher-than-expected operating profit.

Abrdn provided guidance for FY24, projecting costs below £1,075 million, which is slightly below the VA consensus of £1,078 million. This implies over £74 million in net cost savings.

The company reiterated its FY25 target of achieving £150 million in annualized cost savings.