abrdn PLC (ABDN) - New transformation programme and trading statement

[idpickering]

abrdn plc is today announcing a new transformation programme targeting an annualised cost reduction of at least £150m by the end of 2025. This programme is designed to restore our core Investments business to an acceptable level of profitability and allow for incremental reinvestment into growth areas. This marks another step on abrdn's journey to align its resources and capabilities to meet client needs and reinforce areas of strength across the Group.

abrdn plc is also today providing an update on its year-end 2023 assets under management and administration (AUMA) including second half 2023 net flows, and revenue margin guidance. Going forward, abrdn intends to provide the market with a trading update, including AUMA and net flows, for the first and third quarters of the year.

Commenting, Stephen Bird, CEO abrdn plc, said:

"Market conditions have remained challenging for our mix of business, and this is reflected in our year-end AUMA, flow numbers, and margins. The Board and I are committed to taking these significant cost actions now to restore our core Investments business to a more acceptable level of profitability.

Although our business model benefits from the diversification that comes from operating three businesses, we will not rest until all of them are contributing strongly to group profitability, as Adviser and interactive investor have done in 2023.

The new transformation programme announced today, when completed, will deliver a step change in our cost to income ratio. We exceeded our £75m cost reduction target for 2023 for Investments, but we recognise more needs to be done. After a root and branch review, we are now re-engineering and simplifying our business model to remove at least £150m of costs - mostly from group functions and support services. The programme will largely be implemented in 2024, completing in 2025. These changes will allow us to continue our focus on building a growth business."

https://www.investegate.co.uk/announcem ... nt/8003237

Also posted on Company News here; viewtopic.php?p=642234#p642234

I know some hereabouts hold these, so this may be of interest here.

Ian (No holding).

[Arborbridge]

abrdn plc is today announcing a new transformation programme targeting an annualised cost reduction of at least £150m by the end of 2025. This programme is designed to restore our core Investments business to an acceptable level of profitability and allow for incremental reinvestment into growth areas. This marks another step on abrdn's journey to align its resources and capabilities to meet client needs and reinforce areas of strength across the Group.

abrdn plc is also today providing an update on its year-end 2023 assets under management and administration (AUMA) including second half 2023 net flows, and revenue margin guidance. Going forward, abrdn intends to provide the market with a trading update, including AUMA and net flows, for the first and third quarters of the year.

Commenting, Stephen Bird, CEO abrdn plc, said:

"Market conditions have remained challenging for our mix of business, and this is reflected in our year-end AUMA, flow numbers, and margins. The Board and I are committed to taking these significant cost actions now to restore our core Investments business to a more acceptable level of profitability.

Although our business model benefits from the diversification that comes from operating three businesses, we will not rest until all of them are contributing strongly to group profitability, as Adviser and interactive investor have done in 2023.

The new transformation programme announced today, when completed, will deliver a step change in our cost to income ratio. We exceeded our £75m cost reduction target for 2023 for Investments, but we recognise more needs to be done. After a root and branch review, we are now re-engineering and simplifying our business model to remove at least £150m of costs - mostly from group functions and support services. The programme will largely be implemented in 2024, completing in 2025. These changes will allow us to continue our focus on building a growth business."

https://www.investegate.co.uk/announcem ... nt/8003237

Also posted on Company News here; viewtopic.php?p=642234#p642234

I know some hereabouts hold these, so this may be of interest here.

Ian (No holding).

Translation could be: "We've made some terrible decisions and now we're spending lots of money to dig ourselves out of a hole. We'll do better in future, honest. "

Arb.

[Dod101]

https://www.investegate.co.uk/announcem ... nt/8003237

Also posted on Company News here; viewtopic.php?p=642234#p642234

I know some hereabouts hold these, so this may be of interest here.

Ian (No holding).

Translation could be: "We've made some terrible decisions and now we're spending lots of money to dig ourselves out of a hole. We'll do better in future, honest. "

Arb.

What’s the betting that their main business could be II in the not too distant future? To be fair to them, they are certainly not the only active fund manager to be in trouble, following the March of the passives.

Dod

[idpickering]

What’s the betting that their main business could be II in the not too distant future? To be fair to them, they are certainly not the only active fund manager to be in trouble, following the March of the passives.

Dod

I couldn't agree more. Cheers for your input. ABDN are down 2.7% as I type.

Ian.

[77ss]

.......

What’s the betting that their main business could be II in the not too distant future? To be fair to them, they are certainly not the only active fund manager to be in trouble, following the March of the passives.

Dod

Ownership was one of the (several) reasons that caused me to leave ii.

I wondered if Aberdeen was in so much trouble (a -ve 5 yr TR!) that it would need to sell ii.

[Dod101]

.......

What’s the betting that their main business could be II in the not too distant future? To be fair to them, they are certainly not the only active fund manager to be in trouble, following the March of the passives.

Dod

Ownership was one of the (several) reasons that caused me to leave ii.

I wondered if Aberdeen was in so much trouble (a -ve 5 yr TR!) that it would need to sell ii.

abrdn (to give it its proper stupid name) has of course been in trouble for years so this is nothing new. In fact it goes back to Martin Gilbert who built abrdn through a series of takeovers and mergers. These gave the illusion of growth but in fact the figures were only ever as good as the next merger. Active manages like abrdn, Baillie Gifford and Schroders are all feeling the effect of the march of the passive index funds which of course far undercut them in terms of fees and popularity. abrdn though seems particularly clueless as to how to counter the index funds.

Dod

[midgesgalore]

abrdn (to give it its proper stupid name) ...
Dod

Flippantly, they could maybe look at this too.
On second thoughts that would cost them even more money

midgesgalore