Aberdeen International Inc.

Good morning, everybody, and thank you very much for joining our Q1 trading call this morning. With me today is Ian Jenkins, our interim CFO. I'm going to focus on Q1, of course, but I'll also make a few comments about April, not least to pre-empt some of your questions. First, starting with the highlights from the quarter. AUMA at the end of Q1 was £500 billion. On the positives, we had strong inflows for Interactive Investor, but this was more than offset by market effects and outflows in Investments and Advisor. Growth in Interactive Investor was strong once again, with total customers up 9% year-on-year, and this includes 29% annual growth in SIPs. Net outflows in Advisor of £0.6 billion were represent an improvement versus prior quarters, driven by restored service, enhanced platform functionality and repricing. In investments, the Q1 outflow of £6.4 billion largely reflects the redemption from the low-margin mandate I mentioned at the full year results. I'm going to add that following a large quant mandate win in April, Net flows within institutional and retail wealth are, in fact, now positive year-to-date. As we set out at the year-end, our strategy is to become the UK's leading wealth business and to reposition our investments business to areas of strength and market growth. We're a long-term player with a long-term focus. Despite the heightened market uncertainty of recent weeks, we've made good progress toward our objectives this year. In fact, we haven't seen any significant client-led effects in investments or advisor. And in II, the only effective note was higher trading volumes in the first half of April. Now, turning to our businesses in a little more detail. Starting with Interactive Investor, which has maintained the strong momentum seen in recent quarters. Total customer numbers are up to 450,000, which now includes 88,000 high-value SIP customers. II achieved strong net flows of 1.6 billion, with AUMA increasing slightly to just under 78 billion. And as a reminder, II was number one in net flows in 2024. During the quarter, we saw record levels of engagement, with an average of 24,000 trades per day on the platform, which is an increase of 19% versus Q1 last year. These trends have continued into April, with II maintaining strong inflows, enhanced daily trading volumes, and sustained its customer growth. Earlier this month, we announced the acquisition of Jarvis Management's direct-to-consumer retail book, This small acquisition is expected to complete in Q3 for a consideration of around £10 million and is expected to bring approximately £1 billion of assets onto our platform. With impressive performance to date, II is on track to meet its 26 growth targets, supported by an enhanced customer offering with the launchers of the managed SIP, II Advice and II360 all soon to come. Turning now to Advisor. AUMA was just under £74 billion at the end of the quarter, down 2% compared to the year end, primarily reflecting lower markets but also net outflows of £0.6 billion. Positively, this is a better quarter than achieved in any of the quarters in 2024. But we aren't where we need to be yet. Following our intense focus in recent months, services are now working well and we had a really good performance through the latest tax year-end. But of course, we have ambition to do even better. Taken together with our enhanced platform functionality and the recent repricing, our target is to have at least £1 billion of net inflows next year. and in investments, which in spite of market headwinds, is delivering on its strategic priorities. AUM was down 3% in the period to just under £360 billion, with movements in the quarter reflecting lower markets and net outflows. Most of the £6.4 billion net outflow was driven by the £4.2 billion mandate redemption I flagged to you all at the year end. This has gone through both our IRW and insurance partners' lines. On the positive side, quarterly gross inflows in IRW, excluding liquidity, were at the highest level for over two years and 30% higher than in Q4 last year. Within this, we saw a strong performance in fixed income, with net inflows of £1.5 billion in the quarter, benefiting from a significant European pension client mandate. However, equities have continued to see elevated net outflows in a challenging market. I would mention that the £3.3 billion net outflow in the quarter included £0.7 billion in relation to a previously announced fund merger, as well as £0.7 billion redemption that will have a negligible revenue impact. And following a £6 billion quant mandate that funded earlier this week, net flows across IRW are now positive year-to-date. And looking ahead, we continue to target a material uplift in profitability with a 2026 target of at least £100 million of adjusted operating profit. At a group level, we've seen encouraging trends since the end of the quarter, with the large quants mandates win and sustained momentum in II. And before you ask, Group AUMA is slightly up compared to the end of March. Looking ahead, we're on track to meet our transformation target of at least 150 million of annualised cost saving by the end of this year. Richard Wilson, our Group COO, is focused on driving further long-term benefits of transformation across our business and for our clients and colleagues. As I said at the full year and at the start of this call, our ambition is to be the UK's leading wealth and investments group. Not only are we committed to delivering on our 26 targets, but also to transforming the group's culture and our clients' experience. And with that, Ian and I are very happy to take your questions.

Thank you. Ladies and gentlemen, if you would like to ask a question today, please signal by pressing star 1 on your telephone keypad. Ian, that is star 1 for your questions today. And up first, we have a question from Enrico Bolzoni from JP Morgan. Please go ahead. Your line is now open.

Yes, good morning, and thank you for taking my questions. Starting with advisor, you mentioned you made significant progresses. Can you just confirm that now all the clients have been migrated to the new pricing structure? And can you give us some color on how do you see that relative to the street? You think you're very competitive now? or more expensive than others or cheaper than others. So just some color that would be helpful. I also wanted to ask you with respect to the cash balances in AI that increased quite nicely. You are growing penetration in SIP. Is that a contributor of that? Can you remind us if clients that also have a pension typically have higher cash balances relative to clients that don't have a pension, just have ISA and unwrapped accounts? Thank you.