Abrdn shares slump as AuM fall; Doubles share buyback

Abrdn shares slumped on Tuesday as it reported a drop in assets under management in challenging market conditions and announced a doubling of its share buyback programme.

The FTSE 100 company said it had been impacted by a difficult market and a 'risk-off' environment leading to net outflows.

Abrdn reported assets under management and administration (AUMA) of £495.7bn at June 30, compared with £500bn at the end of December. Analysts expected AUMA of £500bn, according to a company-compiled forecast.

Net outflows were £4.4bn for the first six months of 2023.

It reported net operating revenue rising 4% to £721m, with the adviser and personal segments seeing growth, which compensated for the lower revenue in investments. Adjusted operating profit rose to £127m, marking a 10% increase.

However, the investments segment experienced a revenue drop of 15% to £466m, reflecting net outflows and a shift of client assets towards debt products and cash amid rising interest rates.

It added that it was close to completing its initial £150m share buyback, announcing an extension of another £150m, bringing the programme to £300m.

“We continued to move at pace to execute our strategy over the first six months of 2023 in a challenging macro environment,” said chief executive officer Stephen Bird.

“We are on track to deliver our £75m cost savings target in Investments as we continue our work to restore that business to a more acceptable level of profitability.”

“This supported a share buyback of £150m, which is near completion, and we are announcing an extension to this programme to £300m.

Reporting by Josh White for Sharecast.com.