Asset manager abrdn on Tuesday reported its first increase in annual revenue since the merger that created the current company.
‘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,’ said Chief Executive Officer Stephen Bird.
The Edinburgh-based firm, whose name is a shortening of Aberdeen, reported IFRS pretax profit of £1.12 billion in 2021, up 33% from £838 million, as fee-based revenue rose by 6.3% to £1.52 billion from £1.43 billion in 2020.
Assets under management and administration grew by 1.3% to £542 billion from £535 billion.
abrdn kept its annual dividend unchanged at 14.6 pence per share.
‘Strategically, we have made huge strides forward,’ Bird continued.
‘We have simplified and extended the relationship with our largest client, Phoenix [Group Holdings]. We have successfully rebranded as abrdn which gives us a unified global identity and purpose. We have divested non-core assets and built out our capabilities across our three vectors, including in private markets and digital content.’
He added: ‘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 Covid-19 pandemic.’
abrdn shares were down 2.4% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 7,490.66
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Hang Seng: up 0.2% at 22,761.71
Nikkei 225: closed up 1.2% at 26,844.72
S&P/ASX 200: closed up 0.7% at 7,096.50
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DJIA: closed down 166.15 points, 0.5%, at 33,892.60
S&P 500: closed down 0.2% at 4,373.94
Nasdaq Composite: closed up 0.4% at 13,751.40
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EUR: down at $1.1221 ($1.1243)
GBP: flat at $1.3425 ($1.3415)
USD: down at JP¥115.05 (JP¥115.27)
Gold: up at $1,906.87 per ounce ($1,900.27)
Oil (Brent): up at $100.02 a barrel ($97.65)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday’s key economic events still to come
0955 CET Germany manufacturing purchasing managers’ index
1000 CET EU eurozone manufacturing PMI
1400 CET Germany provisional consumer price index
0930 GMT UK manufacturing PMI
0945 EST US manufacturing PMI
1000 EST US ISM manufacturing PMI
1630 EST US API weekly statistical bulletin
2100 EST US President Biden State of the Union address
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Satellite images show a vast military column amassing just north of the Ukrainian capital Kyiv, where residents are braced for a Russian assault. The Russian army tells them they can ‘freely leave’ on one highway going south as it hints of attacks on civilian areas. Russian forces shell Ukraine’s second city Kharkiv, killing at least 11 civilians in residential areas, its mayor says. An AFP journalist in the city sees a destroyed school, burned out Russian armoured vehicles and corpses of Russian soldiers after earlier fighting. Russian forces reach the southern city of Kherson near Moscow-controlled Crimea, setting up checkpoints on its outskirts, its mayor says. Moscow claimed to have besieged the city two days ago. Kyiv says 352 civilians have been killed, including 14 children, since the invasion began last Thursday.
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The number of people fleeing war in Ukraine has surged to over half a million, while a scandal was brewing at the border with Poland over the alleged racist treatment of African refugees. More than 500,000 people have fled the war in Ukraine to neighbouring countries, according to UN High Commissioner for Refugees Filippo Grandi. This was around 80,000 more than the figure reported on Sunday by the UN refugee agency UNHCR. The majority of Ukrainian refugees have so far fled to Poland, with around 300,000 arriving since the war broke out, according to the Polish border guard. On Sunday alone, almost 100,000 people are said to have crossed the shared border into Poland.
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There was a slight improvement in business conditions across China’s manufacturing sector in February, according to the latest IHS Markit survey. The headline seasonally adjusted purchasing managers’ index rose to 50.4 in February from 49.1 at the start of the year. The rate of improvement was softer than the long-run series average of 51.0. Production has now risen in three of the past four months, though this month’s increase was only slight, being only just above the neutral reading of 50. Factories reported a slight increase in output and the fastest increase in total sales since June. However, the pandemic weighed on external demand with new export orders falling again in February. This was also stymied by difficulties in shipping items to clients. Suppliers’ delivery times lengthened amid reports of material and staff shortages. Average input costs also hit a high and selling prices increased at the steepest rate since last October.
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Japan’s manufacturing sector saw softer expansion in February, figures from IHS Markit showed, as lower production levels and stagnating new orders weighed. The headline au Jibun Bank Japan manufacturing PMI slipped to 52.7 points in February from 55.4 in January, meaning Japan’s manufacturing sector has improved for the 13th month in a row - albeit at a slower pace in February. February’s figure marked the weakest expansion since September last year.
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The manufacturing sector in Ireland continued to grow strongly in February but at a slower pace than the month before, survey results showed. The AIB Ireland manufacturing purchasing managers’ index score was 57.8 points last month, down from 59.4 in January. IHS Markit, which conducts the survey, said the factory activity reading has been trending down since hitting a record high of 64.1 points in May last year. However, February’s score remained well above the long-run survey average of 52.2. Coming in above 50 points, the reading indicated expansion and was the 17th successive month to do so. Input price inflation remained a problem for Irish manufacturers, however.
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BROKER RATING CHANGES
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Morgan Stanlay raises Rightmove to ’equal-weight’ (’underweight’) - pt 724 (692) pence
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JPMorgan raises Mondi to ’overweight’ (neutral) - price target 2122 (2000) pence
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JPMorgan raises ITM Power to ’overweight’ (neutral) - price target 470 (410) pence
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COMPANIES - FTSE 100
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Paddy Power-owner Flutter Entertainment swung to a pretax loss in 2021, but growth in the US continued. Flutter Entertainment said 2021 was another strong year of growth as the gambling operator made progress against strategic objectives, driven by recreational customers. For 2021, revenue increased 37% to £6.04 billion from £4.41 billion in 2020 but swung to a pretax loss of £288 million from a £1.1 million profit, after taking a £543 million charge for non-cash amortisation from acquired intangibles. On a adjusted pro forma basis, Flutter posted a pretax profit of £620 million, down 24% from £813 million. The Dublin-based firm said recreational customers drove revenue growth, rising 23% to 7.6 million average monthly players. In the US, its FanDuel sports-betting arm maintained the ‘number one position’ due to product leadership, Flutter asserted, with 40% online sportsbook market share in the fourth quarter. Looking ahead, Flutter said trading in the first 7 weeks of 2022 has been in line with expectations with revenue up 2% year-on-year, reflecting strong comparatives which had benefited from very favourable sports results. Further, assuming there are a normal run of sports results, Flutter expects revenue growth to accelerate as 2022 progresses, reflecting the phasing of sports margin comparables and safer gambling measures taken in 2021.
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Croda International said it delivered a record performance in 2021 with all of the speciality chemical company’s businesses trading ahead of pre-pandemic levels. For 2021, pretax profit was £411.5 million, up 53% from £269.5 million in 2020 on revenue of £1.89 billion, up 36% from £1.39 billion. Croda declared a 100.0p annual dividend, up 9.9% from 91.0p paid out in 2020. Looking ahead, Croda expects to post growth in 2022 in line with medium-term expectations. It thinks margins in the Consumer Care and Life Sciences divisions will remain strong this year. ‘Our excellent strategic progress during the COVID-19 pandemic has included progressing our transition to a pure-play Consumer Care and Life Sciences company, with our agreement to sell the majority of our industrial businesses. As a result, Croda will now be focused on faster growth, higher return markets, positioning us to deliver more consistent sales growth and an even stronger profit margin,’ said Chief Executive Officer Steve Foots.
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Testing specialist Intertek Group said it achieved strong progress in 2021, highlighting that global supply chain disruption meant the need for safety and sustainability assurance ‘more critical than ever’. For 2021, pretax profit was £413.4 million, up 20% from £343.9 million in 2020 on revenue of £2.79 billion, up 1.9% from £2.74 billion. Intertek declared a 2021 dividend of 105.8p, unchanged from 2020. Looking ahead, Intertek said it was well-positioned to generate robust like-for-like revenue growth at constant rates, margin progression, and strong free cash flow in 2022. ‘The Covid-19 pandemic has made the case for total quality assurance clearer and stronger for our clients and we expect the $250 billion global quality assurance market to grow faster post-Covid. Moving forward, all stakeholders in society expect governments and corporations to build back a better world with a sharper focus on end-to-end quality assurance,’ said Chief Executive Officer Andre Lacroix.
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COMPANIES - FTSE 250
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Building supplies business Travis Perkins enjoyed a strong boost in sales and returned to profitability as the company benefited from the boom in housebuilding and renovations during the pandemic. The company said sales hit £4.6 billion in the 12 months to the end of 2021, up from £3.7 billion a year earlier, with pretax profit reaching £305.6 million compared with a £20.3 million pretax loss in 2020. Bosses said they had a strong year following a restructuring of the business, although they admitted trading conditions were difficult due to well-documented rises in inflation and supply chain problems hitting the entire sector during the pandemic. Looking ahead, they said they expect inflation pressures to continue but hope to enjoy the benefits of hybrid working, as households adapt their living space and the housing market remains strong. Travis Perkins added that it hopes to enjoy strong growth from government targets for achieving net zero and decarbonising UK housing stock.
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COMPANIES - GLOBAL
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German chemicals and pharmaceuticals company Bayer said it was back in the black in 2021, thanks primarily to a strong performance of its agrochemicals division. Its return to profit came after the coronavirus pandemic and litigation costs had pushed it into a massive loss a year earlier. Bayer said in a statement that it booked a net profit of €1.0 billion last year, compared with a loss of €10.5 billion in 2020. The maker of aspirin said it also returned to profit at an underlying or operating level, with earnings before interest and tax showing a profit of €3.3 billion, compared with a loss of €16.1 billion the year before. ‘The Bayer group had a successful year in 2021, both operationally and strategically,’ the statement said. ‘We posted substantial growth, strengthened our innovation pipeline and made progress toward our sustainability targets. All this shows that Bayer is on the right track!’ said Chief Executive Werner Baumann.
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Toyota Motor plans to resume work at all of its plants in Japan on Wednesday following a brief shutdown due to a cyberattack on one of its domestic suppliers, the carmaker said on Tuesday. Supplier Kojima Industries suspects it may have been hit by a cyberattack on Monday that crippled its computer system. Kojima Industries makes metal, plastic and electronic components. Toyota temporarily shut down work at 28 production lines in 14 factories across Japan. Toyota has already been suffering from chip shortages and Covid-19-related disruptions since January.
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Tuesday’s shareholder meetings
Velocity Composites PLC - AGM
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