Aberdeen Shares Fall as Client Outflows Overshadow Profit Beat

Aberdeen Group (LON: ABDN), the asset manager and owner of the Interactive Investor trading platform, saw its shares fall sharply on Wednesday after half-year results showed £3.0bn of client withdrawals, even though adjusted operating profit beat forecasts.

The stock was down 4.75% at 236.8p by early afternoon, having opened at 244.4p and touched a low of 228p, against Tuesday’s close of 248.6p. Proactive Investors reported an intraday fall of 6.4% to 232.8p.

Aberdeen’s half-year report, published via RNS earlier today, showed adjusted operating profit up 21% year-on-year to £151m, ahead of a £145m consensus forecast, with adjusted diluted earnings per share of 8.2p versus a 7.4p estimate cited by Proactive Investors. The interim dividend was held flat at 7.3p per share, and the group reaffirmed full-year targets of adjusted operating profit of at least £300m and net capital generation of around £300m.

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Instead, the market focused on £3.0bn of net outflows, against consensus expectations of roughly £800m of net inflows. The Investments division shed £5.6bn excluding liquidity products, including around £4bn of lower-margin equity withdrawals and a £1bn credit mandate that had been expected in the second quarter but was delayed to early July. Interactive Investor, the group’s direct-to-consumer investment platform, delivered record net inflows of £6.8bn, with profit up 18% to £84m and customer numbers up 14% to 525,000, but that growth could not offset the drag from Investments.

Chief executive Jason Windsor said: “In a dynamic market, the Group produced a strong performance. Adjusted operating profit is up 21% year-on-year and net capital generation is up 47%.” Broker Peel Hunt called the profit performance “excellent” and named Interactive Investor the “star of the show”, keeping a buy rating and 294p price target on the stock.

Peel Hunt’s buy rating and 294p price target were reaffirmed alongside the group’s reiterated full-year guidance of at least £300m in adjusted operating profit and around £300m of net capital generation.