Abrdn has reported profit before tax of £1.15bn, primarily reflecting the recognition of the full market value of a residual stake in HDFC Asset Management and gains on sale of the circa 5% stake in September.
Its full-year results for 2021 also showed fee based revenue 6% higher year-on-year, with adjusted operating profit 47% higher.
This meant a full year dividend of 14.6 pence, in line with existing policy.
A positive trend in first half net outflows continued into the second half, resulting in net outflows of £3.2bn for the year, compared with £12.3bn in 2020.
Assets under management and administration of £542bn were up 1%, reflecting positive market movements, the impact of corporate actions and net flows.
Net outflows across investments improved to £7.6bn, from £15.8bn in 2020.
Institutional and wholesale net outflows (excluding liquidity) improved to £2.1bn, from £8.9bn in 2020, largely due to lower net outflows in equities and net inflows in fixed income and real assets.
Adviser and personal divisions more than doubled net inflows to £3.9bn and £600m, respectively, with record assets under management of £8.9bn in discretionary investment management.
Three-year investment performance was stable, with 67% of assets above benchmark.
The Scottish financial services group also delivered improved operating leverage, with a cost/income ratio of 79%, benefitting from a 1% reduction in adjusted operating expenses due to focus on cost management.
Adjusted capital generation increased by 40% to £366m, while a "disciplined approach" to capital management delivered surplus regulatory capital of £1.8bn, with £1.6bn of capital generated and £800m deployed in driving growth and returns to shareholders.
During the year, abrdn completed migration of more than £460bn worth of assets onto a single global investment platform.
In Asia, the group strengthened its leadership team and delivered 13% growth in revenue.
The results also noted strong performance in the real assets franchise, with assets up 25% to £48bn.
Extended capabilities come through the acquisition of majority stake in European logistics property investor Tritax, which has increased its assets under management by 12% to £6.5bn since the deal.
The personal finance division continued with its planned turnaround, achieving adjusted operating profit of £8m.
It expanded digital and content capabilities through the acquisition of investing insights platform Finimize, while simplifying the business with sales of Parmenion, a Nordics property firm, and two US private equity businesses, as well as exiting from the Indonesian market.
Abrdn's outlook included a focus on rationalisation, simplification and increased streamlining to accelerate efficiency gains and create operating leverage within its investment division.
The plan it also to maintain a "sustainable" dividend policy of 14.6p per annum, with the intention of growing the dividend in line with an assessment of medium term profit growth, once the dividend is 1.5 times covered by adjusted capital generation.
The statement also committed to shareholder returns, demonstrated by intention to return around £300m of net proceeds from the sale of a 4% stake in Phoenix to shareholders, with the method and timing to be announced "as soon as practicable".
Chief executive Stephen Bird commented: “This was our reset year - in 2021 we set out a clear strategy for how we will create long-term sustainable growth and arrest the decline in revenue - today I am very pleased to report strong progress for this first year of our three year plan.
“For the first time since the merger, we have reported an increase in revenue for the full year – as well as an improved cost/income ratio of 79%, and a 47% increase in adjusted operating profit.
“We remain focused on delivering compound annual revenue growth in the high single figures, this will enable us to exit 2023 with a cost/income ratio of around 70%.”
Bird continued that abrdn has simplified and extended the relationship with largest client Phoenix, alongside a successful rebrand.
“We have divested non-core assets and built out our capabilities across our three vectors, including in private markets and digital content.
“More broadly, we have sharpened the focus of our Investments business to identify the key areas where we have a true competitive advantage.
“And, late in the year, we announced our proposed acquisition of Interactive Investor – a transaction that transforms our personal vector, diversifies group revenues and significantly expands our client reach.”
He concluded: “Clearly, markets are volatile right now, geopolitical risk and inflation are rising and there remains an element of uncertainty about the pace at which different economies are recovering from the impacts of the pandemic.
“We benefit from a strong capital position enabling us both to continue to invest in the business and return money to shareholders.”
John Moore, senior investment manager at wealth manager Brewin Dolphin, commented: “It has been a challenging few years for shareholders in abrdn, but there are some indications in today’s results that the company is headed in a more positive direction.
“Assets under management and revenues are beginning to stabilise and costs are improving – in addition, its investment in Tritax is beginning to bear fruit and the acquisition of Interactive Investor can help diversify the business.
“The situation in Ukraine will obviously affect abrdn - not least with reports of the company struggling to sell a small stake in Rosneft - but there are tentative signs the management team’s strategy is beginning to yield results which, in turn, should help improve investor sentiment.”
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