Aberdeen Group hails Interactive Investor growth but other challenges remain

Posting an adjusted interim operating profit of £151 million, up 21 per cent on the year before, the group said it was confident in hitting its targets for the full year.

Group assets under management and administration (AUMA) grew by 4 per cent year-on-year to £579.4 billion while net operating revenue nudged up 2 per cent to £643m. The interim dividend was held at 7.3p per share.

Chief executive Jason Windsor said: “In a dynamic market, the group produced a strong performance.

“Interactive Investor performed very strongly, delivering record net inflows in the first half of the year, with customer numbers up by 14 per cent to 525k.

“In Adviser, adjusted operating profit was broadly stable on last year at £41m. We have made significant improvements to service, the proposition and client experience, however we have more work to do to achieve growth in flows.

“Within Investments, focus on efficiency helped to drive a 9 per cent increase in adjusted operating profit to £38m. We have continued to see improvements in investment performance, and we are seeing positive momentum across a number of our specialist areas which, together with a number of bolt-on acquisitions, will support future earnings growth.”

He added: “Our focus for the second half of the year is on delivering more for our customers and achieving the 2026 targets that we have set for the group. Looking ahead, we see substantial headroom for further growth across the business.”

Net outflows of £3bn in the first half were worse than analysts’ expectations and deeper than the £900m of outflows in the same six-month period last year.

Within its Adviser business, the group - which last year ditched its derided Abrdn brand name - noted that profit had been broadly stable while net flows remained “challenging” with actions taken to return to growth.

Nick Sherrard, managing director of Edinburgh-based consultancy Label Sessions, said: “Aberdeen has delivered against much of what leaders promised earlier this year, with Interactive Investor continuing to be the stand-out performer. That answers some of the critics. But it doesn’t answer the bigger question: what is this company now?

“Is this an asset manager with a platform attached, or a wealth business carrying an asset manager? That's much less about branding and more about the company’s overall proposition.

“There is a genuinely valuable company to build here. Delivering wealth, advice, and investing as one connected service requires Aberdeen to decide what it is. It can then begin to land that message with customers and markets alike, accepting what that means for the parts of the business that no longer fit.”

Towards the end of 2021, Aberdeen, which was formerly known as Standard Life Aberdeen, agreed a £1.5bn deal to buy online investment platform Interactive Investor, just weeks after news of talks emerged. It said at the time that the acquisition would “significantly enhance” its presence and growth opportunities within a “fast-growing and attractive market”.