Shares in fund management group Abrdn (ABDN) slid to the bottom of the FTSE 100 leaderboard with a drop of 9.5% to 198p after it revealed a drop in total assets in the first half.

In contrast, shares in FTSE 250 wealth management firm Quilter (QLT) rallied over 13% to 80.5p as assets increased slightly and it said it saw full-year profits topping expectations.

MIXED FORTUNES

Abrdn chief executive Stephen Bird must be scratching his head at today’s sell-off given the group increased its revenue by 4% and its operating profit by 10% in what was described as a ‘challenging’ first half.

At the same time, thanks to the sale of its stake in India’s HDFC Life and Asset Management businesses, the firm doubled its share buyback from £150 million to £300 million, news which would normally see investors rushing to buy shares.

Instead, they chose to focus on the net outflow figure of £4.4 billion, despite the first-time inclusion of Interactive Investor, and the 15% drop in operating income in Investments due to lower average AUM (assets under management).

Interestingly, outflows were particularly notable in equities where ‘as client asset allocation moved to debt products and cash in the rising interest rate environment’ according to the firm.

Quilter on the hand posted a £2.1 billion or 2% increase in assets under management, almost entirely due to positive market movements of £1.9 billion, while its high-net-worth business grew market share.

Operating profit and the operating margin increased due to tight cost control, allowing adjusted pre-tax profit to rise by 25%, and although costs are expected to rise in the second half, chief executive Steven Levin predicted adjusted full-year profits would be ‘meaningfully ahead of current market expectations, assuming broadly stable markets’.

ABRDN STILL UNLOVED

Back in April we revealed that Abrdn and Quilter were two of the least-loved stocks in the analyst community as measured by their percentage of Sell recommendations.

Revealed: the UK market’s most hated stocks and our picks to bounce back

According to Stockopedia, Abrdn remains the most unloved UK stock with 12 of the 16 analysts covering the firm rating it either Sell or Underperform, and after the stock price reaction to today’s news it looks as if that will remain the case.

Meanwhile, Quilter, which was also on the least-loved list, now only has one Sell recommendation and four Underperforms among the 13 analysts covering the stock, and some of those are probably reviewing their recommendation after today’s price move.

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