Abrdn shares fell 3.5% to 166.8p in early morning trading on Tuesday after adverse market conditions buffeted the company in HY1 2022, dragging revenues down.
The firm swung to an IFRS pre-tax loss of £320 million from a profit of £113 million, driven by £313 million in losses from the change in fair value of its significant investments over the financial period.
Abrdn reported an 8% slide in fee-based revenue to £696, along with a 28% drop in adjusted operating profit to £115 million, as a result of market movements.
The company noted a higher cost/income ratio at 83% against 79% year-on-year due to lower revenue.
Meanwhile, Abrdn total net outflows ballooned to £35.9 billion compared to £5.6 billion, reflecting the final LBG (Lloyds Banking Group) tranche withdrawal of £24.4 billion.
Abrdn confirmed a fall in assets under management to £508 billion against £542 billion the last year, as a result of lower markets and its final LBG tranche, slightly offset by the inclusion of AUA from its acquisition of interactive investor.
The firm commented its ambitions for revenue and profit growth would take longer than expected due to adverse market conditions.
Abrdn also noted an estimated price tag of £150 million in restructuring costs in FY 2022, alongside additional costs associated with its investments vector cost actions set to be predominantly funded by proceeds from the disposal of non-core assets.
“The half year Group results largely reflect the challenging global economic environment and market turbulence,” said Abrdn CEO Stephen Bird.
“When I became CEO in late 2020 I said that we would pursue a strategy of diversification by refocusing our Investments business in to areas of strength, where we have scale and that lean into global growth trends and also significantly expand our reach into the higher growth UK wealth market.”
“We are doing exactly that and the addition of interactive investor transforms our UK retail presence and future revenue streams. The strength of our balance sheet means that we can continue to invest and reward shareholders.”
Abrdn reported the commencement of the first £150 million buyback of its £300 million shareholder return programme.
The company recommended a HY1 dividend of 7.3p for the financial term.