Look closely, and the FTSE 250 is full of strong businesses. But one has caught my eye after its full-year results revealed genuine promise and signs of a long-term turnaround.
FY25 results
Aberdeen (LSE: ABDN) delivered a solid FY25 on Tuesday (3 March), with adjusted operating profit up 4% to £264m and IFRS statutory profit before tax soaring 76% to £442m, helped by gains on its Standard Life (formerly Phoenix) stake. Net capital generation remained robust at £239m, comfortably supporting the 14.6p dividend — currently a 7% yield.
The standout performer was interactive investor (marketed as ‘ii’). Profits jumped 34% to £155m, fuelled by record trading activity, 500k customers, and a 30% rise in SIPP accounts. Its flat pricing and ongoing platform innovations continue to resonate strongly with individual investors.
Adviser posted lower profits after strategic price cuts aimed at enticing independent financial advisers, but net outflows almost halved to £2.2bn, signalling the first steps of a long-awaited turnaround.
In Investments, net flows stabilised, with a modest positive £0.1bn — nothing dramatic, but perhaps the first signs the business is finally beginning to turn the corner.
The transformation programme exceeded its £150m target, delivering £180m in annualised savings while enabling reinvestment in technology and customer experience.
With a high dividend yield and the momentum from ii, Aberdeen is showing the early signs of a business that could recover from years of outflows — and one that investors may soon start to notice.
Shifting global markets
Aberdeen has struggled over the past decade mainly because passive investment vehicles dominated, with US tech giants absorbing the bulk of global capital flows. If you weren’t in the Magnificent 7, beating the market was nearly impossible.
That backdrop is changing. Volatility is returning, the dollar looks historically high, and investors are reallocating capital.
Emerging Markets, Asia Pacific, the UK, and Europe have all outperformed the US for the first time in years. Defensive assets, like gold and silver, have also attracted attention. Aberdeen’s Gold ETF, launched in 2009 with $10m, now manages over $7bn. The market is evolving fast.
Its Investments business serves global sovereigns, institutional investors, and other large clients — typically slow to shift mandates, but a meaningful change could be a major boost. Meanwhile, independent financial advisers may turn to Aberdeen if client portfolios underperform.
With a leaner Investments business, disciplined cost management, and strong capital coverage, the asset manager is gradually building the infrastructure to capture these long-term structural trends. The turnaround is a marathon, not a sprint, but the potential payoff is significant.
What’s the verdict?
In my view, Aberdeen is a classic contrarian play. Market trends are shifting away from concentrated US tech dominance toward broader, more volatile opportunities. Emerging markets, alternative assets, and undervalued regions now present structural tailwinds for its sizeable Investments division.
At the individual level, people are increasingly taking control of their finances, which is reflected in growing SIPP portfolios and record engagement on interactive investor. This demonstrates that Aberdeen can capture everyday investor demand while steadily building long-term structural strength.
With disciplined cost management, a leaner Investments business, and a strong capital position, the company is gradually laying the foundations to benefit from these evolving market dynamics. For all these reasons, I recently bought the shares myself.
