Abrdn has announced its first profits growth in three years and is dropping its controversial brand name after years of ridicule.

The company will become ‘aberdeen group’ and has also launched the search for a chairman to succeed Sir Douglas Flint.

“We are announcing today that we will change the company’s name to aberdeen group plc,” said the company, without elaborating on the decision.

“We do not intend to make any changes to our subsidiary legal entity names or the names of our underlying funds (including the CUSIPs or ISINs) at this time, and our LSE ticker will remain ABDN. We will now start to use “aberdeen” as the principal trading identity for our Investments and Adviser businesses.”

In a media call after the results were published, chief executive Jason Windsor admitted the name had become a “distraction” but said it was always pronounced “aberdeen” which was well-received globally. He said the change had been decided internally, with no significant cost implications.

Previous CEO Stephen Bird, who stepped down last May, led the rebranding to Abrdn in 2021. The group had previously been called Standard Life Aberdeen following the merger of Standard Life and Aberdeen Asset Management in 2017.

Chairman Sir Douglas Flint told the AGM in 2022 that the abrdn brand was created internally.

“We had it benchmarked by one of the world’s leading brand advisory agencies and they introduced alternatives that certainly were not as good,” he said.

The removal of most of the vowels quickly prompted sarcastic comment and there were questions about how it affected the image of the company. Over the years, the company has insisted that the name was more popular than critics claimed and as recently as January Mr Windsor said there was no plan to change it.

On performance in the past year, each of its three businesses increased its contribution to profits and Mr Windsor said it was surpassing its transformation targets.

Cost discipline, better markets and a strong performance by interactive investor enabled the company to improve adjusted operating profit by 2% to £255m (2023: £249m), with all three businesses reporting higher profits than last year. Shares in the group rose by 14% in early trade before closing 7.69% (12.45p) higher at 174.45p.

“It is important to make clear, however, this is well below the level of profitability we aspire to, and we see much more potential across the group,” said the company.

It posted IFRS profit before tax of £251m (2023: loss £6m) which includes higher adjusted operating profit, the gain on sale of the European-headquartered Private Equity business of £92m and lower restructuring and corporate transaction expenses of £100m (2023: £152m).

AUMA is up 3% on last year to £511.4bn with total Group outflows slowing to £1.1bn, representing a substantial improvement on 2023 when outflows were £17.6bn.

The company said the transformation programme launched in January 2024 has surpassed the year one targets, delivering £70m of in-year cost savings and over £100m of savings on an annualised basis. It said it remains on track to deliver a reduction in run-rate costs of at least £150m by the end of 2025, with a commitment to continually seek further efficiencies.

The company said it had struck a deal to release value from its defined benefit pension surplus, freeing up £35m a year from July, which it said would provide “a significant” annual boost to capital generation.

“The group grew profit in 2024 for the first time in three years, with each business increasing its contribution,” said Mr Windsor.

“As our momentum shifts to growth, we have a clear focus on improving client experience and shareholder returns. We have strengthened and streamlined our senior leadership team and, with our sharper focus, we are committing to better results again in 2025 and 2026.

“Our position in the fast-growing UK Wealth market is exciting. interactive investor had excellent performance in 2024, achieving the number one position in the UK D2C market for net flows, and we expect continuation of this growth.

“Adviser is in the number two position in an attractive growth market. While outflows persisted through 2024, we are working hard to re-establish market leading service levels. We have a strengthened Adviser leadership team in place, with a clear plan of action, to deliver necessary improvements to return to growth.

“Investments saw a significant turnaround in flows compared to 2023, and improved investment performance. Xavier Meyer is now leading the repositioning of Investments to become a specialist asset manager, focused on its strengths in Real Assets, Credit and Specialist Equities – in each of which we have good competitive positions and clear growth prospects.

“Alongside our results, we are setting out our strategy to become a leading Wealth & Investments group, with new 2026 targets that underline the potential for the profitable growth we see in all of our businesses.

“Together with active capital management – and by further lowering restructuring spend – we are able to maintain the historic dividend per share from materially higher, and sustainable capital generation.

“This is a group to be proud of, with a promising future. We will deliver by looking forward with confidence and removing distractions. To that end, we are changing our name to aberdeen group plc. This is a pragmatic decision marking a new phase for the organisation, as we focus on delivering for our customers, people and shareholders.”

In the annual report and accounts published today, Sir Douglas Flint’s chairman’s statement includes an update on the commencement of a chairman succession plan. This follows the work Sir Douglas led to refresh the board last year, and the announcement last week of the appointment of Siobhan Boylan as Group Chief Financial Officer.

Market reaction

Panmure Liberum says: “The market has not believed in aberdeen (yes, the ee’s are back) either in the ability to get costs out or to have a strategy for growth.

“That view is challenged today. The focus for the group will be on the (“fast-growing”) UK wealth industry through ii and Adviser, with Investments running at usefully lower cost and focusing on core strengths in Real Assets, Credit and Specialist Equities.

“An agreement on the pension fund will generate £35m per annum of incremental capital generation. Consensus is materially adrift of the company’s ambitions. BUY.”

Comment: What’s in a name? Quite a lot, it seems