abrdn plc

Half Year Results 2024

Part 2 of 3

2. Statement of Directors' responsibilities

Each of the Directors, whose names and functions are listed on the abrdn plc website, www.abrdn.com, confirms to the best of his or her knowledge and belief that:

-    The condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows and associated notes, have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK.

 

-    The interim management report includes a fair review of the information required by:

-    DTR 4.2.7R of the FCA's Disclosure Guidance and Transparency Rules Sourcebook, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated financial information and a description of the principal risks and uncertainties for the remaining six months of the year.

-    DTR 4.2.8R of the FCA's Disclosure Guidance and Transparency Rules Sourcebook, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

-    As per principle N of the UK Corporate Governance Code, the Half year results 2024 taken as a whole, present a fair, balanced and understandable assessment of the Company's position and prospects.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Changes to Directors during the period

As announced on 27 February, Catherine Bradley retired from the Board at the conclusion of the AGM on 24 April. Stephen Bird stepped down from the Board on 24 May. The Company also announced the appointment of Jason Windsor as Interim Group CEO on 24 May following the commencement of a formal CEO search process.

By order of the Board

 

Sir Douglas Flint Chairman 5 August 2024	Jason Windsor Interim Chief Executive Officer 5 August 2024

 

 

3. Independent review report to abrdn plc

 

Conclusion     

We have been engaged by abrdn plc ('the Company' or 'the Group') to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement of changes in equity, condensed consolidated statement of cash flows and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK and the Disclosure Guidance and Transparency Rules ('the DTR') of the UK's Financial Conduct Authority ('the UK FCA')

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ('ISRE (UK) 2410') issued for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention that causes us to believe that the directors have inappropriately adopted the going concern basis of accounting, or that the directors have identified material uncertainties relating to going concern that have not been appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the Group to cease to continue as a going concern, and the above conclusions are not a guarantee that the Group will continue in operation.

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

The annual financial statements of the Group are prepared in accordance with UK-adopted international accounting standards.

The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted for use in the UK.

In preparing the condensed set of financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Our responsibility 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion section of this report.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached. 

 

Richard Faulkner

for and on behalf of KPMG LLP

Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh
EH1 2EG

5 August 2024

 

4. Financial information

Condensed consolidated income statement

		6 months	6 months	Full Year
		2024	2023	2023
	Notes	£m	£m	£m
Revenue from contracts with customers	4.4(a)	697	763	1,474
Cost of sales	4.4(b)	(30)	(42)	(76)
Net operating revenue		667	721	1,398
Restructuring and corporate transaction expenses	4.6	(51)	(113)	(152)
Impairment of intangibles acquired in business combinations and through the purchase of customer contracts	4.6	(5)	(37)	(63)
Amortisation of intangibles acquired in business combinations and through the purchase of customer contracts	4.6	(59)	(65)	(126)
Staff costs and other employee-related costs	4.6	(263)	(275)	(529)
Other administrative expenses	4.6	(295)	(274)	(593)
Total administrative and other expenses		(673)	(764)	(1,463)
Net gains or losses on financial instruments and other income
Fair value movements and dividend income on significant listed investments	4.5	13	(144)	(114)
Other net gains or losses on financial instruments and other income	4.5	72	26	116
Total net gains or losses on financial instruments and other income		85	(118)	2
Finance costs		(12)	(12)	(25)
Profit on disposal of subsidiaries and other operations	4.2(b)	88	-	79
Profit on disposal of interests in joint ventures	4.2(b)	11	-	-
Reversal of impairment of interests in joint ventures	4.12	-	-	2
Share of profit or loss from associates and joint ventures	4.12	21	4	1
Profit/(loss) before tax		187	(169)	(6)
Tax (expense)/credit	4.7	(16)	24	18
Profit/(loss) for the period		171	(145)	12
Attributable to:
Equity shareholders of abrdn plc		165	(151)	1
Other equity holders		6	6	11
Non-controlling interests - ordinary shares		-	-	-
		171	(145)	12
Earnings per share
Basic (pence per share)	4.8	9.2	(7.7)	0.1
Diluted (pence per share)	4.8	9.1	(7.7)	0.1

 

The Notes on pages 25 to 49 are an integral part of this condensed consolidated financial information.

 

Condensed consolidated statement of comprehensive income

For the six months ended 30 June 2024

		6 months	6 months	Full Year
		2024	2023	2023
	Notes	£m	£m	£m
Profit/(loss) for the period		171	(145)	12
Items that will not be reclassified subsequently to profit or loss:
Remeasurement gains/(losses) on defined benefit pension plans	4.17	72	(81)	(139)
Share of other comprehensive income of associates and joint ventures	4.12	1	-	(4)
Total items that will not be reclassified subsequently to profit or loss		73	(81)	(143)
Items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on cash flow hedges		9	(13)	(40)
Exchange differences on translating foreign operations		(7)	(42)	(35)
Share of other comprehensive income of associates and joint ventures	4.12	(50)	(18)	(27)
Items transferred to the condensed consolidated income statement
Fair value (gains)/losses on cash flow hedges		(9)	30	28
Realised foreign exchange (gains)	4.2	-	-	(1)
Equity holder tax effect of items that may be reclassified subsequently to profit or loss	4.7	-	(4)	3
Total items that may be reclassified subsequently to profit or loss		(57)	(47)	(72)
Other comprehensive income for the period		16	(128)	(215)
Total comprehensive income for the period		187	(273)	(203)
Attributable to:
Equity shareholders of abrdn plc		181	(279)		(214)
Other equity holders		6	6		11
Non-controlling interests - ordinary shares		-	-		-
		187	(273)		(203)

 

The Notes on pages 25 to 49 are an integral part of this condensed consolidated financial information.

 

Condensed consolidated statement of financial position

As at 30 June 2024

		30 Jun	30 Jun	31 Dec
		2024	20231	2023
	Notes	£m	£m	£m
Assets
Intangible assets	4.11	1,514	1,548	1,578
Pension and other post-retirement benefit assets	4.17	821	772	740
Investments in associates and joint ventures accounted for using the equity method	4.12	198	245	229
Property, plant and equipment	4.13	150	162	163
Deferred tax assets		202	220	215
Financial investments	4.19	1,919	2,080	2,047
Receivables and other financial assets		1,262	1,238	1,071
Current tax recoverable		7	11	10
Other assets	4.14	74	100	77
Assets held for sale	4.15	11	83	19
Cash and cash equivalents		1,397	1,407	1,196
		7,555	7,866	7,345
Assets backing unit linked liabilities	4.19
Financial investments		655	873	669
Receivables and other unit linked assets		8	8	4
Cash and cash equivalents		15	13	13
		678	894	686
Total assets		8,233	8,760	8,031
Liabilities
Third party interest in consolidated funds	4.19	206	212	187
Subordinated liabilities		604	588	599
Pension and other post-retirement benefit provisions	4.17	12	9	12
Deferred tax liabilities		120	145	129
Current tax liabilities		5	6	6
Derivative financial liabilities	4.19	4	2	9
Other financial liabilities1		1,393	1,461	1,241
Provisions	4.18	62	58	66
Other liabilities		4	10	4
Liabilities of operations held for sale	4.15	2	6	2
		2,412	2,497	2,255
Unit linked liabilities	4.19
Investment contract liabilities		670	724	684
Third party interest in consolidated funds		-	165	-
Other unit linked liabilities		8	5	2
		678	894	686
Total liabilities		3,090	3,391	2,941
Equity
Share capital	4.16(a)	257	274	257
Shares held by trusts	4.16(b)	(132)	(147)	(141)
Share premium reserve	4.16(a)	640	640	640
Retained earnings		4,509	4,547	4,449
Other reserves		(343)	(159)	(327)
Equity attributable to equity shareholders of abrdn plc		4,931	5,155	4,878
Other equity		207	207	207
Non-controlling interests - ordinary shares		5	7	5
Total equity		5,143	5,369	5,090
Total equity and liabilities		8,233	8,760	8,031

1.  The Group has made a presentational change to show Deferred income within Other financial liabilities.

The Notes on pages 25 to 49 are an integral part of this condensed consolidated financial information.

 

Condensed consolidated statement of changes in equity

For the six months ended 30 June 2024

		Share capital	Shares held by trusts	Share premium reserve	Retained earnings	Other reserves	Total equity attributable to equity shareholders of abrdn plc	Other equity	Non-controlling interests - ordinary shares	Total equity
	Notes	£m	£m	£m	£m	£m	£m	£m	£m	£m
1 January 2024		257	(141)	640	4,449	(327)	4,878	207	5	5,090
Profit for the period		-	-	-	165	-	165	6	-	171
Other comprehensive income for the period		-	-	-	23	(7)	16	-	-	16
Total comprehensive income for the period		-	-	-	188	(7)	181	6	-	187
Issue of share capital	4.16(a)	-	-	-	-	-	-	-	-	-
Dividends paid on ordinary shares	4.10	-	-	-	(130)	-	(130)	-	-	(130)
Interest paid on other equity		-	-	-	-	-	-	(6)	-	(6)
Reserves credit for employee share-based payments		-	-	-	-	15	15	-	-	15
Transfer to retained earnings for vested employee share-based payments		-	-	-	24	(24)	-	-	-	-
Shares acquired by employee trusts		-	(10)	-	-	-	(10)	-	-	(10)
Shares distributed by employee and other trusts and related dividend equivalents		-	19	-	(21)	-	(2)	-	-	(2)
Aggregate tax effect of items recognised directly in equity	4.7	-	-	-	(1)	-	(1)	-	-	(1)
30 June 2024		257	(132)	640	4,509	(343)	4,931	207	5	5,143

 

 

		Share capital	Shares held by trusts	Share premium reserve	Retained earnings1	Other reserves	Total equity attributable to equity shareholders of abrdn plc1	Other equity	Non-controlling interests - ordinary shares	Total equity1
	Notes	£m	£m	£m	£m	£m	£m	£m	£m	£m
31 December 2022		280	(149)	640	4,986	(129)	5,628	207	7	5,842
Effect of application of IFRS 9 on Investments in associates and joint ventures accounted for using the equity method1		-	-	-	51	-	51	-	-	51
1 January 2023		280	(149)	640	5,037	(129)	5,679	207	7	5,893
(Loss)/profit for the period		-	-	-	(151)	-	(151)	6	-	(145)
Other comprehensive income for the period		-	-	-	(99)	(29)	(128)	-	-	(128)
Total comprehensive income for the period		-	-	-	(250)	(29)	(279)	6	-	(273)
Issue of share capital	4.16(a)	-	-	-	-	-	-	-	-	-
Dividends paid on ordinary shares	4.10	-	-	-	(142)	-	(142)	-	-	(142)
Interest paid on other equity		-	-	-	-	-	-	(6)	-	(6)
Share buyback	4.16(a)	(6)	-	-	(98)	6	(98)	-	-	(98)
Reserves credit for employee share-based payments		-	-	-	-	13	13	-	-	13
Transfer to retained earnings for vested employee share-based payments		-	-	-	20	(20)	-	-	-	-
Shares acquired by employee trusts		-	(19)	-	-	-	(19)	-	-	(19)
Shares distributed by employee and other trusts and related dividend equivalents		-	21	-	(22)	-	(1)	-	-	(1)
Aggregate tax effect of items recognised directly in equity	4.7	-	-	-	2	-	2	-	-	2
30 June 2023		274	(147)	640	4,547	(159)	5,155	207	7	5,369

1.  The Group implemented IFRS 9 in 2019. However, as permitted under a temporary exemption granted to insurers in IFRS 4 Insurance Contracts, the Group's insurance joint venture, Heng An Standard Life Insurance Company Limited (HASL), applied IFRS 9 at 1 January 2023 following the implementation of the new insurance contracts standard, IFRS 17. In line with the approach adopted by the Group on its implementation of IFRS 9 on 1 January 2019, the comparatives have not been restated for HASL's adoption of IFRS 9. The impact of HASL adopting IFRS 9 is recognised in retained earnings at 1 January 2023.

 

		Share capital	Shares held by trusts	Share premium reserve	Retained earnings1	Other reserves	Total equity attributable to equity shareholders of abrdn plc1	Other equity	Non-controlling interests - ordinary shares	Total equity1
	Notes	£m	£m	£m	£m	£m	£m	£m	£m	£m
31 December 2022		280	(149)	640	4,986	(129)	5,628	207	7	5,842
Effect of application of IFRS 9 on Investments in associates and joint ventures accounted for using the equity method1		-	-	-	51	-	51	-	-	51
1 January 2023		280	(149)	640	5,037	(129)	5,679	207	7	5,893
Profit for the year		-	-	-	1	-	1	11	-	12
Other comprehensive income for the year		-	-	-	(170)	(45)	(215)	-	-	(215)
Total comprehensive income for the year		-	-	-	(169)	(45)	(214)	11	-	(203)
Issue of share capital	4.16(a)	-	-	-	-	-	-	-	-	-
Dividends paid on ordinary shares	4.10	-	-	-	(279)	-	(279)	-	-	(279)
Interest paid on other equity		-	-	-	-	-	-	(11)	-	(11)
Share buyback	4.16(a)	(23)	-	-	(302)	23	(302)	-	-	(302)
Other movements in non-controlling interests in the year		-	-	-	-	-	-	-	(2)	(2)
Reserves credit for employee share-based payments		-	-	-	-	24	24	-	-	24
Transfer to retained earnings for vested employee share-based payments		-	-	-	31	(31)	-	-	-	-
Transfer between reserves on impairment of subsidiaries	4.16(c)	-	-	-	169	(169)	-	-	-	-
Shares acquired by employee trusts		-	(27)	-	-	-	(27)	-	-	(27)
Shares distributed by employee and other trusts and related dividend equivalents		-	35	-	(38)	-	(3)	-	-	(3)
31 December 2023		257	(141)	640	4,449	(327)	4,878	207	5	5,090

1.  The Group implemented IFRS 9 in 2019. However, as permitted under a temporary exemption granted to insurers in IFRS 4 Insurance Contracts, the Group's insurance joint venture, HASL, applied IFRS 9 at 1 January 2023 following the implementation of the new insurance contracts standard, IFRS 17. In line with the approach adopted by the Group on its implementation of IFRS 9 on 1 January 2019, the comparatives have not been restated for HASL's adoption of IFRS 9. The impact of HASL adopting IFRS 9 is recognised in retained earnings at 1 January 2023.

The Notes on pages 25 to 49 are an integral part of this condensed consolidated financial information.

 

Condensed consolidated statement of cash flows

For the six months ended 30 June 2024

		6 months	6 months	Full Year
		2024	2023	2023
	Notes	£m	£m	£m
Cash flows from operating activities
Profit/(loss) before tax		187	(169)	(6)
Change in operating assets		(129)	(86)	157
Change in operating liabilities		147	181	(109)
Adjustment for non-cash movements in investment income		(5)	(1)	3
Other non-cash and non-operating items		(21)	175	210
Taxation paid1		(9)	(23)	(34)
Net cash flows from operating activities		170	77	221
Cash flows from investing activities
Purchase of property, plant and equipment		(7)	(9)	(18)
Proceeds from sale of property, plant and equipment		1	-	-
Acquisition of subsidiaries and unincorporated businesses net of cash acquired		-	-	(108)
Disposal of subsidiaries net of cash disposed of		44	-	139
Acquisition of investments in associates and joint ventures		-	(2)	(2)
Proceeds in relation to contingent consideration		2	2	21
Payments in relation to contingent consideration		(4)	(4)	(12)
Disposal of investments in associates and joint ventures		20	-	-
Purchase of financial investments		(49)	(291)	(445)
Proceeds from sale or redemption of financial investments		197	871	1,029
Taxation paid on sale or redemption of financial investments1		-	(41)	(41)
Prepayment in respect of potential acquisition of customer contracts	4.21(b)	1	13	20
Acquisition of intangible assets		(3)	(35)	(41)
Net cash flows from investing activities		202	504	542
Cash flows from financing activities
Payment of lease liabilities - principal		(12)	(13)	(24)
Payment of lease liabilities - interest		(3)	(3)	(6)
Shares acquired by trusts		(9)	(19)	(27)
Interest paid on subordinated liabilities and other equity		(15)	(16)	(20)
Other interest paid		(1)	(2)	(3)
Cash received relating to collateral held in respect of derivatives hedging subordinated liabilities		8	(11)	(50)
Share buyback		-	(98)	(302)
Ordinary dividends paid	4.10	(130)	(142)	(279)
Net cash flows from financing activities		(162)	(304)	(711)
Net increase in cash and cash equivalents		210	277	52
Cash and cash equivalents at the beginning of the period		1,210	1,166	1,166
Effects of exchange rate changes on cash and cash equivalents		(5)	(16)	(8)
Cash and cash equivalents at the end of the period2		1,415	1,427	1,210
Supplemental disclosures on cash flows from operating activities
Interest received		42	37	85
Dividends received		40	53	91
Rental income received on investment property		2	2	3

1.  Total taxation paid for the six months ended 30 June 2024 was £9m (six months ended 30 June 2023: £64m, 12 months ended 31 December 2023: £75m).

2.  Comprises cash and cash equivalents, including cash and cash equivalents backing unit linked liabilities, and overdrafts which are reported in other financial liabilities in the condensed consolidated statement of financial position. Cash and cash equivalents at 30 June 2024 were £1,415m (30 June 2023: £1,427m, 31 December 2023: £1,210m) of which £3m (30 June 2023: £7m, 31 December 2023: £1m) is included in assets of operations held for sale in the condensed consolidated statement of financial position (refer Note 4.15). The Group had no overdrafts at 30 June 2024 (30 June 2023: £nil, 31 December 2023: £nil).

The Notes on pages 25 to 49 are an integral part of this condensed consolidated financial information.

 

Notes to the condensed consolidated financial statements

4.1   Presentation of the condensed consolidated financial statements

(a)      Basis of preparation

The condensed consolidated half year financial information has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK and the Disclosure Guidance and Transparency Rules of the UK's Financial Conduct Authority.

The accounting policies for recognition, measurement, consolidation and presentation as set out in the Annual report and accounts for the year ended 31 December 2023 have been applied in the preparation of the condensed consolidated half year financial information except as noted below.

(a)(i)   New standards, interpretations and amendments to existing standards that have been adopted by the Group

The Group has adopted the following new International Financial Reporting Standards (IFRSs), interpretations and amendments to existing standards, which are effective for annual periods beginning on or after 1 January 2024.

Amendments to existing standards

-    Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Amendments to IAS 1.

-    Lease Liability in a Sale and Leaseback - Amendments to IFRS 16.

-    Disclosures: Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7.

The Group's accounting policies have been updated to reflect these amendments. Management considers the implementation of the above amendments to have no significant impact on the Group's financial statements.

(b)      Going concern                    

The Group's business activities, together with the factors likely to affect its future development, performance and financial position, are set out in the Management report and in the Annual report and accounts 2023 Strategic report. This includes details on our liquidity and capital positions and our principal risks, including the impacts of the macroeconomic environment and global and regional geopolitical events on these principal risks.

In preparing these half year results on a going concern basis, the Directors have considered the following matters and have taken into account market uncertainty.

-    The Group has cash and liquid resources of £1.8bn at 30 June 2024. In addition, the Company has a revolving credit facility of £400m as part of our contingency funding plans which is due to mature in 2026 and remains undrawn.

-    The Group's indicative regulatory Common Equity Tier 1 (CET1) capital surplus on an IFPR basis was £954m in excess of capital requirements at 30 June 2024. The regulatory CET1 capital surplus does not include the value of the Group's significant listed investment in Phoenix Group Holdings (Phoenix).

-    The Group performs regular stress and scenario analysis as described in the Annual report and accounts 2023 Viability statement. The diverse range of management actions available meant the Group was able to withstand these extreme stresses.

-    The Group's operational resilience processes have operated effectively during the period including the provision of services by key outsource providers.

Based on a review of the above factors the Directors are satisfied that the Group and Company have and will maintain sufficient resources to enable them to continue operating for at least 12 months from the date of approval of the condensed consolidated financial statements. Accordingly, the financial statements have been prepared on a going concern basis. There were no material uncertainties relating to this going concern conclusion.

(c)      Condensed consolidated half year financial information

This condensed consolidated half year financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Additionally, the comparative figures for the financial year ended 31 December 2023 are not the Company's statutory accounts for that financial year. The statutory accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The condensed consolidated half year financial information has been reviewed, not audited.

4.2   Acquisitions and disposals

(a)      Acquisitions

(a)(i) Prior period acquisitions of subsidiaries and other operations

Healthcare fund management capabilities of Tekla Capital Management

On 27 October 2023, abrdn Inc. purchased the healthcare fund management capabilities of Tekla Capital Management LLC (Tekla) through a purchase agreement. Tekla's investment team transferred to the Group as part of the agreement. The assets under management at the acquisition date were £2.3bn. At acquisition the cash consideration was £108m and the fair value of deferred and contingent consideration was £11m. The acquisition further strengthens abrdn's closed-end fund business and allows the Group to draw on Tekla's expertise in investing in the healthcare sector as it looks to build out its offering in this area.

(b)      Disposals

(b)(i) Current period disposal of subsidiaries and other operations

European-headquartered Private Equity business

Profit on disposal of subsidiaries and other for the six months ended 30 June 2024 relates to the sale of the Group's European-headquartered Private Equity business to Patria Investments. The sale completed on 26 April 2024. The European-headquartered Private Equity business was reported in the Investments segment.

 

The gain on sale before tax, which is included in profit on disposals of subsidiaries and other operations in the condensed consolidated income statement for the six months ended 30 June 2024 for the European-headquartered Private Equity business was calculated as follows:

26 April 2024	£m
Total assets of operations disposed of	(29)
Total liabilities of operations disposed of	11
Net assets of operations disposed of	(18)
Cash consideration (less transaction costs) and outstanding intercompany balances1,2	70
Fair value of deferred/contingent consideration and retained interest3	36
Gain on sale before tax	88

1.  Following the completion of the sale, £3m relating to a number of unsettled outstanding intercompany balances which previously eliminated on consolidation are now recognised as an asset of the Group.

2.  Included in cash consideration is £10m for additional upfront consideration which is determined based on the net assets of the European-headquartered Private Equity business following a number of adjustments detailed in the sale price agreement. The additional consideration of £10m is a provisional figure and remains subject to agreement with Patria Investments.

3.  The Group has also retained certain carried interest entitlements which has been recognised in the condensed consolidated statement of financial position at a fair value of £6m.

Prior to the completion of the sale, the European-headquartered Private Equity business was classified as an operation held for sale (refer Note 4.15).

(b)(ii)              Current period disposal of joint ventures

Virgin Money Unit Trust Managers (Virgin Money UTM)

Profit on disposal of interests in joint ventures for the six months ended 30 June 2024 of £11m relates to the sale of the Group's interest in Virgin Money UTM to its joint venture partner, Clydesdale Bank, on 2 April 2024 for a cash consideration of £20m. Prior to the sale, the Group's interest in Virgin Money UTM was classified as held for sale and had a carrying value of £9m (refer Note 4.15). The interest in Virgin Money UTM did not form part of the Group's reportable segments.

(b)(iii) Prior period disposal of subsidiaries and other operations

There were no disposals of subsidiaries and other operations during the six months ended 30 June 2023.

During the 12 months ended 31 December 2023, the Group made two material disposals of subsidiaries and other operations:

-    On 1 September 2023, the Group completed the sale of abrdn Capital Limited (aCL), its discretionary fund management business, to LGT UK Holdings Limited.

-    On 2 October 2023, the Group completed the sale of its US Private Equity and Venture Capital capabilities to HighVista Strategies LLC.

aCL and the Group's US Private Equity and Venture Capital capabilities were reported in the ii (previously named Personal) and Investments segments respectively.

Other disposals included the sale of abrdn Australia Ltd to Melbourne Securities Corporation Limited on 1 July 2023. The disposal is not considered material to the Group.

Profit on disposal of subsidiaries and other operations for the 12 months ended 31 December 2023 have been summarised below.

	£m
Disposal of aCL	58
Disposal of US Private Equity and Venture Capital capabilities	22
Other disposals	(1)
Profit on disposal of subsidiaries and other operations for the 12 months ended 31 December 2023	79

On disposal, a net gain of £1m was recycled from the translation reserve and was included in determining the profit on disposal of subsidiaries and other operations for the 12 months ended 31 December 2023.

4.3   Segmental analysis

The Group's reportable segments have been identified in accordance with the way in which the Group is structured and managed. IFRS 8 Operating Segments requires that the information presented in the financial statements is based on information provided to the 'Chief Operating Decision Maker' which for the Group is the executive leadership team.

(a)      Basis of segmentation

(a)(i)   Current reportable segments

Investments

Our global asset management business which provides investment solutions for Institutional, Retail Wealth and Insurance Partners clients.

Adviser

Our UK financial adviser business which provides platform services to wealth managers and advisers.

interactive investor (ii) (previously named Personal)

ii, our direct investing platform, and our financial planning business, abrdn Financial Planning and Advice. It also included the Group's discretionary fund management business until the completion of the sale of aCL on 1 September 2023. Refer Note 4.2(b)(iii) for further details.

In addition to the Group's reportable segments above, the analysis of adjusted profit in Section 4.3(b)(i) below also reports the following:

Other business operations and corporate costs (Other)

Other comprises of Finimize and our digital innovation group along with certain corporate costs.

(a)(ii)              Changes to basis of segmentation

As noted above, the Group reports Other in addition to its reportable segments. For the six months ended 30 June 2023, the Group had previously only reported certain corporate costs in addition to its reportable segments (reported as Corporate/strategic). These costs are now reported within Other along with Finimize and our digital innovation group which were previously reported within Investments. Including Finimize and our digital innovation group within Other rather than the Investments reportable segment is considered to provide a clearer depiction of business structure and performance. Comparative amounts for the six months ended 30 June 2023 have now been prepared on a consistent basis. Comparative amounts for the 12 months ended 31 December 2023 were already prepared on this basis.

(b)      Reportable segments - adjusted profit and revenue information

(b)(i) Analysis of adjusted profit

Adjusted operating profit is presented by reportable segment in the table below.

		Investments	Adviser	ii	Other	Total
6 months 2024	Notes	£m	£m	£m	£m	£m
Net operating revenue	4.4	406	119	137	5	667
Adjusted operating expenses		(372)	(54)	(82)	(31)	(539)
Adjusted operating profit		34	65	55	(26)	128
Adjusted net financing costs and investment return						42
Adjusted profit before tax						170
Tax on adjusted profit						(41)
Adjusted profit after tax						129
Adjusted for the following items
Restructuring and corporate transaction expenses	4.6					(51)
Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts	4.6					(64)
Change in fair value of significant listed investments	4.5					(15)
Profit on disposal of subsidiaries and other operations						88
Profit on disposal of interests in joint ventures						11
Dividends from significant listed investments	4.5					28
Share of profit or loss from associates and joint ventures						21
Other	4.9					(1)
Total adjusting items including results of associates and joint ventures						17
Tax on adjusting items						25
Profit attributable to other equity holders						(6)
Profit attributable to non-controlling interests - ordinary shares						-
Profit for the period attributable to equity shareholders of abrdn plc						165
Profit attributable to other equity holders						6
Profit attributable to non-controlling interests - ordinary shares						-
Profit for the period						171

Net operating revenue is reported as the measure of revenue in the analysis of adjusted operating profit and relates to revenues generated from external customers.

		Investments restated1	Adviser	ii2	Other restated1	Total
6 months 2023	Notes	£m	£m	£m	£m	£m
Net operating revenue	4.4	461	103	152	5	721
Adjusted operating expenses		(427)	(54)	(91)	(22)	(594)
Adjusted operating profit		34	49	61	(17)	127
Adjusted net financing costs and investment return						24
Adjusted profit before tax						151
Tax on adjusted profit						(24)
Adjusted profit after tax						127
Adjusted for the following items
Restructuring and corporate transaction expenses	4.6					(113)
Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts	4.6					(102)
Change in fair value of significant listed investments	4.5					(181)
Dividends from significant listed investments	4.5					37
Share of profit or loss from associates and joint ventures						4
Other	4.9					35
Total adjusting items including results of associates and joint ventures						(320)
Tax on adjusting items						48
Profit attributable to other equity holders						(6)
Profit attributable to non-controlling interests - ordinary shares						-
Loss for the period attributable to equity shareholders of abrdn plc						(151)
Profit attributable to other equity holders						6
Profit attributable to non-controlling interests - ordinary shares						-
Loss for the period						(145)

1.  The breakdown of Investments and Other for the six months ended 30 June 2023 has been restated in line with the changes to the Group's reportable segments. Refer Note 4.3(a)(ii) for further details.

2.  Previously named Personal.

 

Full Year 2023	Notes	Investments £m	Adviser £m	ii £m	Other £m	Total £m
Net operating revenue	4.4	878	224	287	9	1,398
Adjusted operating expenses		(828)	(106)	(173)	(42)	(1,149)
Adjusted operating profit		50	118	114	(33)	249
Adjusted net financing costs and investment return						81
Adjusted profit before tax						330
Tax on adjusted profit						(50)
Adjusted profit after tax						280
Adjusted for the following items
Restructuring and corporate transaction expenses	4.6					(152)
Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts	4.6					(189)
Profit on disposal of subsidiaries and other operations	4.2(b)					79
Change in fair value of significant listed investments	4.5					(178)
Dividends from significant listed investments	4.5					64
Share of profit or loss from associates and joint ventures						1
Reversal of impairment of interests in joint ventures	4.12					2
Other	4.9					37
Total adjusting items including results of associates and joint ventures						(336)
Tax on adjusting items						68
Profit attributable to other equity holders						(11)
Profit attributable to non-controlling interests - ordinary shares						-
Profit for the year attributable to equity shareholders of abrdn plc						1
Profit attributable to other equity holders						11
Profit attributable to non-controlling interests - ordinary shares						-
Profit for the year						12

 

4.4   Net operating revenue

(a)      Revenue from contracts with customers

The following table provides a breakdown of total revenue from contracts with customers.

	6 months 2024	6 months 2023 restated2	Full Year  2023
	£m	£m	£m
Investments
Management fee income - Institutional and Retail Wealth1	344	399	769
Management fee income - Insurance Partners1	70	75	132
Performance fees and carried interest	7	12	18
Other revenue from contracts with customers	11	13	27
Revenue from contracts with customers for the Investments segment	432	499	946
Adviser
Platform charges	97	85	184
Treasury income	17	15	31
Other revenue from contracts with customers	6	4	11
Revenue from contracts with customers for the Adviser segment	120	104	226
ii3
Fee income - Advice and Discretionary	13	37	57
Account fees	26	27	54
Trading transactions	33	25	48
Treasury income	68	66	134
Revenue from contracts with customers for the ii segment3	140	155	293
Revenue from contracts with customers for Other	5	5	9
Total revenue from contracts with customers	697	763	1,474

1.  In addition to revenues earned as a percentage of AUM, management fee income includes certain other revenues not based on a percentage of AUM.

2.  The breakdown of revenue from contracts with customers for the six months ended 30 June 2023 has been restated in line with the changes to the Group's reportable segments. Refer Note 4.3(a)(ii) for further details.

3.  Previously named Personal.

(b)      Cost of sales

The following table provides a breakdown of total cost of sales.

	6 months 2024	6 months 2023	Full Year  2023
	£m	£m	£m
Cost of sales
Commission expenses	22	33	64
Other cost of sales	8	9	12
Total cost of sales	30	42	76

Other cost of sales includes amounts payable to employees and others relating to carried interest and performance fee revenue.

(c)      Reconciliation of revenue from contracts with customers to net operating revenue as presented in the analysis of adjusted operating profit

The following table provides a reconciliation of revenue from contracts with customers as presented in the condensed consolidated income statement to net operating revenue, as presented in the analysis of adjusted operating profit (refer Note 4.3(b)(i) for each of the Group's reportable segments).

	Investments					Adviser				ii				Other				Total
		6 months 2024	6 months 2023 restated1	Full Year 2023	6 months 2024		6 months 2023	Full Year 2023	6 months 2024		6 months 2023	Full Year 2023	6 months 2024		6 months 2023 restated1	Full Year 2023	6 months 2024		6 months 2023	Full Year 2023
		£m	£m	£m	£m		£m	£m	£m		£m	£m	£m		£m	£m	£m		£m	£m
Revenue from contracts with customers		432	499	946	120		104	226	140		155	293	5		5	9	697		763	1,474
Cost of sales		(26)	(38)	(68)	(1)		(1)	(2)	(3)		(3)	(6)	-		-	-	(30)		(42)	(76)
Net operating revenue		406	461	878	119		103	224	137		152	287	5		5	9	667		721	1,398

1.  The breakdown of Investments and Other for the six months ended 30 June 2023 has been restated in line with the changes to the Group's reportable segments. Refer Note 4.3(a)(ii) for further details.

There are no differences between net operating revenue as presented in the condensed consolidated income statement and the analysis of Group adjusted profit by segment.

4.5   Net gains or losses on financial instruments and other income

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Fair value movements and dividend income on significant listed investments
Fair value movements on significant listed investments (other than dividend income)	(15)	(181)	(178)
Dividend income from significant listed investments	28	37	64
Total fair value movements and dividend income on significant listed investments	13	(144)	(114)
Non-unit linked business - excluding significant listed investments
Net gains or losses on financial instruments at fair value through profit or loss	23	(11)	6
Interest and similar income from financial instruments at amortised cost	37	30	76
Foreign exchange gain or losses on financial instruments at amortised cost	(2)	(5)	(7)
Other income	15	9	37
Net gains or losses on financial instruments and other income - non-unit linked business - excluding significant listed investments	73	23	112
Unit linked business
Net gains or losses on financial instruments at fair value through profit or loss
Net gains or losses on financial assets at fair value through profit or loss	43	44	69
Change in non-participating investment contract financial liabilities	(44)	(36)	(65)
Change in liability for third party interests in consolidated funds	-	(6)	(1)
Total net gains or losses on financial instruments at fair value through profit or loss	(1)	2	3
Interest and similar income from financial instruments at amortised cost	-	1	1
Net gains or losses on financial instruments and other income - unit linked business1	(1)	3	4
Total other net gains or losses on financial instruments and other income	72	26	116
Total net gains or losses on financial instruments and other income	85	(118)	2

1.  In addition to the Net gains or losses on financial instruments and other income - unit linked business of £(1)m (six months ended 30 June 2023: £3m, 12 months ended 31 December 2023: £4m), there are administrative expenses and policyholder tax of less than £1m (six months ended 30 June 2023: less than £1m, 12 months ended 31 December 2023: £1m) and £(1)m (six months ended 30 June 2023: £3m, 12 months ended 31 December 2023: £3m) respectively. The result attributable to unit linked business for the period is therefore £nil (six months ended 30 June 2023: £nil, 12 months ended 31 December 2023: £nil).

4.6   Administrative and other expenses

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Restructuring and corporate transaction expenses	51	113	152
Impairment of intangibles acquired in business combinations and through the purchase of customer contracts
Impairment of intangibles acquired in business combinations	5	37	63
Amortisation of intangibles acquired in business combinations and through the purchase of customer contracts
Amortisation of intangibles acquired in business combinations	54	59	115
Amortisation of intangibles acquired through the purchase of customer contracts	5	6	11
Total amortisation of intangibles acquired in business combinations and through the purchase of customer contracts	59	65	126
Staff costs and other employee-related costs	263	275	529
Other administrative expenses	295	274	593
Total administrative and other expenses1	673	764	1,463

1.  Total administrative and other expenses includes less than £1m (six months ended 30 June 2023: less than £1m, 12 months ended 31 December 2023: £1m) relating to unit linked business.

There were restructuring expenses of £45m (six months ended 30 June 2023: £90m, 12 months ended 31 December 2023: £121m), mainly consisting of costs to effect our cost transformation programme, including related severance expenses, and platform transformation expenses. The restructuring expenses for the 12 months ended 31 December 2023 were partly offset by a £32m release of the provision for separation costs. Refer Note 4.18 for further details. Corporate transaction expenses were £6m (six months ended 30 June 2023: £23m, 12 months ended 31 December 2023: £31m).

 

4.7   Tax expense

 

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Current tax:
UK	10	8	17
Pillar Two Top-up tax	1	-	-
Overseas	3	47	51
Adjustment to tax expense in respect of prior years	(1)	-	(2)
Total current tax	13	55	66
Deferred tax:
Deferred tax credit arising from the current period1	2	(65)	(69)
Adjustment to deferred tax in respect of prior years	1	(14)	(15)
Total deferred tax	3	(79)	(84)
Total tax expense/(credit)2	16	(24)	(18)

1.  The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.

2.  The tax expense of £16m (six months ended 30 June 2023: tax credit of £24m, 12 months ended 31 December 2023: tax credit of £18m) includes a tax credit of £1m (six months ended 30 June 2023: tax expense of £3m, 12 months ended 31 December 2023: tax expense of £3m) relating to unit linked business.

Tax relating to components of other comprehensive income is as follows:

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Tax relating to fair value gains and losses recognised on cash flow hedges	2	(3)	(10)
Tax relating to cash flow hedge gains and losses transferred to condensed consolidated income statement	(2)	7	7
Equity holder tax effect relating to items that may be reclassified subsequently to profit or loss	-	4	(3)
Tax relating to other comprehensive income	-	4	(3)

All of the amounts presented above are in respect of equity holders of abrdn plc.

Tax relating to items taken directly to equity is as follows:

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Tax relating to share-based payments	1	(2)	-
Tax relating to items taken directly to equity	1	(2)	-

 

4.8   Earnings per share

Basic earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders by the weighted average number of ordinary shares in issue during the period excluding shares owned by the employee trusts that have not vested unconditionally to employees.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume the conversion of all dilutive potential ordinary shares, such as share options granted to employees.

Adjusted earnings per share is calculated on adjusted profit after tax attributable to ordinary equity holders of the Company.

The following table shows details of basic, diluted and adjusted earnings per share.

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Adjusted profit before tax	170	151	330
Tax on adjusted profit	(41)	(24)	(50)
Adjusted profit after tax	129	127	280
Attributable to:
Other equity holders	(6)	(6)	(11)
Non-controlling interests - ordinary shares	-	-	-
Adjusted profit after tax attributable to equity shareholders of abrdn plc	123	121	269
Total adjusting items including results of associates and joint ventures	17	(320)	(336)
Tax on adjusting items	25	48	68
Profit/(loss) attributable to equity shareholders of abrdn plc	165	(151)	1

 

	6 months 2024	6 months 2023	Full Year 2023
	Millions	Millions	Millions
Weighted average number of ordinary shares outstanding	1,794	1,949	1,902
Dilutive effect of share options and awards	22	25	28
Weighted average number of diluted ordinary shares outstanding	1,816	1,974	1,930

In accordance with IAS 33, no share options and awards were treated as dilutive for the six months ended 30 June 2023 due to the loss attributable to equity holders of abrdn plc in this period. This resulted in the diluted earnings per share and adjusted diluted earnings per share for the six months ended 30 June 2023 being calculated using a weighted average number of ordinary shares of 1,949 million.

	6 months 2024	6 months 2023	Full Year 2023
	Pence	Pence	Pence
Basic earnings per share	9.2	(7.7)	0.1
Diluted earnings per share	9.1	(7.7)	0.1
Adjusted earnings per share	6.9	6.2	14.1
Adjusted diluted earnings per share	6.8	6.2	13.9

4.9   Adjusted profit and adjusting items

Adjusted profit excludes the impact of the following items:

-    Restructuring and corporate transaction expenses. Restructuring includes the impact of major regulatory change.

-    Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts.

-    Profit or loss arising on the disposal of a subsidiary, joint venture or equity accounted associate.

-    Change in fair value of/dividends from significant listed investments (refer Section 4.9(a) below).

-    Share of profit or loss from associates and joint ventures.

-    Impairment loss/reversal of impairment loss recognised on investments in associates and joint ventures accounted for using the equity method.

-    Fair value movements in contingent consideration.

-    Items which are one-off and, due to their size or nature, are not indicative of the long-term operating performance of the Group.

The tax expense or credit allocated to adjusting items is based on the tax treatment of each adjusting item.

The operating, investing and financing cash flows presented in the condensed consolidated statement of cash flows are for both adjusting and non-adjusting items.

(a)      Significant listed investments

Following the sale of the Group's final investments in HDFC Life and HDFC Asset Management in May 2023 and June 2023 respectively, the Group has one remaining significant listed investment, Phoenix.

Fair value movements on significant listed investments are included as adjusting items, which is aligned with our treatment of gains on disposal for these holdings when they were classified as associates. Dividends from significant listed investments are also included as adjusting items, as these result in fair value movements.

(b)      Other

Other adjusting items for the six months ended 30 June 2024 include:

-    A £12m gain (six months ended 30 June 2023: £5m gain, 12 months ended 31 December 2023: £23m gain) for net fair value movements in contingent consideration.

-    A £2m fair value gain (six months ended 30 June 2023: £5m loss, 12 months ended 31 December 2023: £5m loss) on a financial instrument liability related to a prior period acquisition.

-    A gain of £5m (six months ended 30 June 2023: £nil, 12 months ended 31 December 2023: gain of £4m) in relation to market gains and losses on the investments held by the abrdn Financial Fairness Trust which is consolidated by the Group. The assets of the abrdn Financial Fairness Trust are restricted to be used for charitable purposes.

-    A £15m release to Other administrative expenses of the prepayment recognised in relation to the Group's purchase of Phoenix's trustee investment plan business for UK pension scheme clients. Refer Note 4.14 for further details.

Other adjusting items for the six months ended 30 June 2023 and the 12 months ended 31 December 2023 included:

-    £36m for an insurance liability recovery in relation to the single process execution event in 2022. The £41m provision expense was included in other adjusting items for the 12 months ended 31 December 2022.

Other adjusting items for the 12 months ended 31 December 2023 also included:

-    £21m for provision expense relating to a potential tax liability. Refer Note 4.18.

 

4.10 Dividends on ordinary shares

	6 months 2024		6 months 2023		Full Year 2023
	Pence per share	£m1	Pence per share	£m	Pence per share	£m
Dividends paid in reporting period
Current year interim dividend	-	-	-	-	7.30	137
Final dividend for prior year	7.30	130	7.30	142	7.30	142
Total dividends paid in reporting period		130		142		279
Dividends relating to reporting period
Interim dividend	7.30	130	7.30	137	7.30	137
Final dividend	-	-	-	-	7.30	130
Total dividends relating to reporting period		130		137		267

1.  Estimated for the current period interim recommended dividend.

Subsequent to 30 June 2024, the Board has declared an interim dividend for 2024 of 7.30 pence per ordinary share (interim 2023: 7.30 pence), an estimated £130m in total (interim 2023: £137m). The dividend is expected to be paid on 24 September 2024 and will be recorded as an appropriation of retained earnings in the financial statements for the year ended 31 December 2024.

4.11 Intangible assets

	30 Jun 2024	30 Jun 2023	31 Dec 2023
	£m	£m	£m
Acquired through business combinations
Goodwill	907	898	912
Brand	10	12	11
Customer relationships and investment management contracts	530	555	579
Technology and other	10	20	15
Internally developed software	14	12	13
Cost of obtaining customer contracts	43	51	48
Total intangible assets	1,514	1,548	1,578

Goodwill at 30 June 2024 comprises a gross carrying value of £4,704m (30 June 2023: £4,665m, 31 December 2023: £4,704m) and accumulated impairment of £3,797m (30 June 2023: £3,767m, 31 December 2023: £3,792m).

There were no additions to intangibles acquired through business combinations in the six months ended 30 June 2024 or the six months ended 30 June 2023. The additions to intangibles acquired through business combinations for the 12 months ended 31 December 2023 related to the acquisition of the healthcare fund management capabilities of Tekla. Refer Note 4.2(a)(i) for further details.

During the six months ended 30 June 2024, the Group recognised an impairment of the goodwill relating to the Finimize cash-generating unit (CGU) which is reported within Other business operations and corporate costs of £5m. Following this impairment, the goodwill allocated to the Finimize CGU is now fully impaired (30 June 2023: £17m, 31 December 2023: £5m). The impairment reflects higher anticipated losses in the period prior to which abrdn anticipates Finimize is likely to achieve profitability and the related Group support required in this period.

The recoverable amount of the Finimize CGU at 30 June 2024 was £10m which was based on fair value less costs of disposal (FVLCD). The FVLCD considered a number of valuation approaches, with the primary approach being a revenue multiple approach. The key assumptions used in determining the revenue multiple valuation were future revenue projections, which were based on management forecasts and market multiples for broadly comparable listed companies, with appropriate discounts applied to take into account profitability, track record, revenue growth potential, and net premiums for control. This is a level 3 measurement as they are measured using inputs which are not based on observable market data.

During the 12 months ended 31 December 2023 and six months ended 30 June 2023, the Group recognised impairments of goodwill of £62m and £37m respectively. In the 12 months ended 31 December 2023, the Group also recognised an impairment of the goodwill relating to the Finimize CGU of £26m for the 12 months ended 31 December 2023 of which £14m was also recognised for the six months ended 30 June 2023. In addition, the Group recognised an impairment of the goodwill relating to the abrdn Financial Planning Limited (aFPL) CGU which is included in the ii segment of £36m of which £23m was also recognised for the six months ended 30 June 2023.

4.12 Investments in associates and joint ventures accounted for using the equity method

	30 Jun 2024	30 Jun 2023	31 Dec 2023
	£m	£m	£m
Associates
Other	15	15	15
Joint ventures
HASL	183	223	214
Other	-	7	-
Total investments in associates and joint ventures accounted for using the equity method	198	245	229

There were no additions to associates accounted for using the equity method during the six months ended 30 June 2024. During the six months ended 30 June 2023 and the 12 months ended 31 December 2023, the Group made additions to Other associates accounted for using the equity method of £2m.

There were no additions to joint ventures accounted for using the equity method (six months ended 30 June 2023: none, 12 months ended 31 December 2023: none).

The share of profit or loss and other comprehensive income from associates and joint ventures for the six months ended 30 June 2024 of £21m (six months ended 30 June 2023: £4m, 12 months ended 31 December 2023: £1m) and £(49)m (six months ended 30 June 2023: £(18)m, 12 months ended 31 December 2023: £(31)m) respectively primarily relates to HASL.

The carrying value of joint ventures accounted for using the equity method for Other at 30 June 2023 primarily related to the Group's interest in Virgin Money UTM which was transferred to held for sale at 31 December 2023. Refer Note 4.15 below. Prior to the transfer, a reversal of prior impairment of the Group's interest of £2m was recognised. The reversal of impairment was included in Reversal of impairment of interests in joint ventures in the condensed consolidated income statement for the 12 months ended 31 December 2023 (six months ended 30 June 2024: £nil, six months ended 30 June 2023: £nil). The interest in Virgin Money UTM did not form part of the Group's reportable segments.

4.13 Property, plant and equipment

	30 Jun 2024	30 Jun 2023	31 Dec  2023
	£m	£m	£m
Owner occupied property	-	1	1
Equipment	44	45	46
Right-of-use assets - property	105	115	115
Right-of-use assets - equipment	1	1	1
Total property, plant and equipment	150	162	163

No impairments of or reversal of impairments for right-of-use assets for property have been recognised in the six months ended 30 June 2024.

For the six months ended 30 June 2023 and the 12 months ended 31 December 2023 impairments of £35m and £39m were recognised respectively. The impairments related to a number of properties in the UK and the US that are no longer being used operationally by the Group. The right-of-use assets are related to the Investments segment (six months ended 30 June 2023 and 12 months ended 31 December 2023: £27m impairment), the ii segment (six months ended 30 June 2023 and 12 months ended 31 December 2023: £1m impairment) and Other business operations and corporate costs (six months ended 30 June 2023: £7m impairment, 12 months ended 31 December 2023: £11m impairment).

For the six months ended 30 June 2023 and the 12 months ended 31 December 2023 the Group also recognised a reversal of impairment of £3m in relation to a property in the UK which was not being used operationally but following the review of properties in the UK was brought back into operational use. The right-of-use asset is related to the Investments segment.

4.14 Other assets

Other assets of £74m (30 June 2023: £100m, 31 December 2023: £77m) includes prepayments of £7m (30 June 2023: £30m, 31 December 2023: £23m) which relate to the Group's purchase of certain products in Phoenix's savings business offered through abrdn's Wrap platform together with Phoenix's trustee investment plan (TIP) business for UK pension scheme clients. Refer Note 4.21(b) for further details.

During the six months ended 30 June 2024, the Group has released £15m of the £19m prepayment recognised in relation to the TIP business to Other administrative expenses in the condensed consolidated income statement following a review of the recoverability of these costs from future profits from the TIP business. The transfer of this business to the Group is now expected to occur in 2025.

4.15 Assets and liabilities held for sale

	30 Jun 2024	30 Jun 2023	31 Dec 2023
	£m	£m	£m
Assets of operations held for sale
threesixty services	6	-	-
abrdn Capital Limited	-	83	-
European-headquartered Private Equity business	-	-	10
Investment Vehicles	5	-	-
Investments in joint ventures accounted for using the equity method
Virgin Money UTM	-	-	9
Assets held for sale	11	83	19
Liabilities of operations held for sale
threesixty services	2	-	-
abrdn Capital Limited	-	6	-
European-headquartered Private Equity business	-	-	2
Liabilities of operations held for sale	2	6	2

The assets and liabilities of operations held for sale (excluding investment vehicles) at 30 June 2024 relate to the sale of the Group's threesixty services business which completed on 2 July 2024. Refer Note 4.23 for further details. The threesixty services business net assets classified as held for sale which were measured at their carrying values were net of intercompany balances between the business and other Group entities. The net assets on a gross basis were also £4m.

In relation to assets and liabilities held for sale at 31 December 2023 and 30 June 2023.

-    The sale of the Group's European-headquartered Private Equity business completed on 26 April 2024. Refer Note 4.2(b)(i) for further details.

-    The sale of the Group's interest in Virgin Money UTM completed on 2 April 2024. Refer Note 4.2(b)(ii) for further details.

-    The sale of abrdn Capital Limited completed on 1 September 2023. Refer Note 4.2(b)(iii) for further details.

4.16 Issued share capital and share premium, shares held by trusts, retained earnings and other reserves

(a)      Issued share capital and share premium

The movement in the issued ordinary share capital and share premium of the Company was:

	6 months 2024			6 months 2023			Full Year 2023
	Ordinary share capital		Share premium	Ordinary share capital		Share premium	Ordinary share capital		Share premium
Issued shares fully paid	13 61/63p each	£m	£m	13 61/63p each	£m	£m	13 61/63p each	£m	£m
At start of period	1,840,740,364	257	640	2,001,891,899	280	640	2,001,891,899	280	640
Shares issued in respect of share incentive plans	1,120	-	-	1,023	-	-	2,414	-	-
Shares bought back on-market and cancelled	-	-	-	(39,587,562)	(6)	-	(161,153,949)	(23)	-
At end of period	1,840,741,484	257	640	1,962,305,360	274	640	1,840,740,364	257	640

All ordinary shares in issue in the Company rank pari passu and carry the same voting rights and entitlement to receive dividends and other distributions declared or paid by the Company.

During the six months to 30 June 2024 the Group has not undertaken any share buybacks.

During 2023, the Group undertook a £300m share buyback programme. The share buyback commenced on 5 June 2023 and was completed on 19 December 2023.

-    During the six months to 30 June 2023, the Company had bought back and cancelled 39,587,562 shares for a total consideration of £98m which included transaction costs and unsettled purchases for 6,138,236 shares.

-    During the 12 months ended 31 December 2023, the Company had bought back and cancelled 161,153,949 shares for a total consideration of £302m which included transaction costs.

The share buyback resulted in a reduction in retained earnings in the six months ended 30 June 2023 and the 12 months ended 31 December 2023 of £98m and £302m respectively. In addition, £6m and £23m respectively were credited to the capital redemption reserve relating to the nominal value of the shares cancelled for these periods.

The Company can issue shares to satisfy awards granted under employee incentive plans which have been approved by shareholders.

(b)      Shares held by trusts

Shares held by trusts relates to shares in abrdn plc that are held by the abrdn Employee Benefit Trust (abrdn EBT), abrdn Employee Trust (abrdn ET) and the Aberdeen Asset Management Employee Benefit Trust 2003 (AAM EBT).

The abrdn EBT, abrdn ET and AAM EBT purchase shares in the Company for delivery to employees under employee incentive plans. Purchased shares are recognised as a deduction from equity at the price paid for them. Where new shares are issued to the abrdn EBT, abrdn ET or AAM EBT the price paid is the nominal value of the shares. When shares are distributed from the trust their corresponding value is released to retained earnings.

The number of shares held by trusts was as follows:

		30 Jun 2024	30 Jun 2023	31 Dec 2023
Number of shares held by trusts
abrdn Employee Benefit Trust		32,299,515	35,540,771	34,076,343
abrdn Employee Trust		22,032,503	22,270,081	22,187,644
Aberdeen Asset Management Employee Benefit Trust 2003		1,926,756	2,194,934	2,080,853

(c)      Retained earnings and other reserves

The merger reserve includes £94m (30 June 2023: £263m, 31 December 2023: £94m) in relation to the Group's asset management businesses. Following the impairment of the Company's investment in abrdn Investments (Holdings) Limited, £169m was transferred from the merger reserve to retained earnings during the 12 months ended 31 December 2023.

There were no transfers from the merger reserve to retained earnings during the six months ended 30 June 2024 and the six months ended 30 June 2023.

4.17 Pension and other post-retirement benefit provisions

The Group operates a number of defined benefit pension plans, the largest of which is the abrdn UK Group plan (principal plan) which is closed to future accrual. The Group also operates two other UK defined benefit plans, which are closed to future accrual, the abrdn ROI plan, which has two employees accruing future benefits, and a number of smaller funded and unfunded defined benefit plans in other countries.

For the UK plans, the trustees set the plan investment strategies to protect the ratio of plan assets to the trustees' measure of the value of assets needed to meet the trustees' objectives. The investment strategies do not aim to protect an IAS 19 surplus or ratio of plan assets to the IAS 19 measure of liabilities.

(a)      Analysis of amounts recognised in the condensed consolidated income statement

The amounts recognised in the condensed consolidated income statement for defined contribution and defined benefit plans are as follows:

	6 months 2024	6 months 2023	Full Year 2023
	£m	£m	£m
Current service cost	24	28	55
Past service cost	-	(5)	(5)
Net interest income	(16)	(18)	(38)
Administrative expenses	9	2	4
Expense recognised in the condensed consolidated income statement	17	7	16

In addition, for the six months ended 30 June 2024, gains of £72m (six months ended 30 June 2023: losses of £81m, 12 months ended 31 December 2023: losses of £139m) have been recognised in other comprehensive income in the condensed consolidated statement of comprehensive income in relation to remeasurement of the defined benefit plans.

(b)      Analysis of amounts recognised in the condensed consolidated statement of financial position

Pension and other post-retirement benefit assets at 30 June 2024 of £821m (30 June 2023: £772m, 31 December 2023: £740m) includes the following amounts in relation to the principal plan:

	30 Jun 2024	30 Jun 2023	31 Dec  2023
	£m	£m	£m
Present value of funded obligation	(1,650)	(1,664)	(1,784)
Fair value of plan assets	2,736	2,819	2,912
Net asset before the limit on plan surplus	1,086	1,155	1,128
Effect of limit on plan surplus1	(271)	(404)	(394)
Net asset	815	751	734

1.  UK recoverable surpluses are reduced to reflect an authorised surplus payments charge of 25% that would arise on a refund. This charge was reduced from 35% to 25% effective from 6 April 2024 and this is reflected in the net asset at 30 June 2024. The comparative figures at 30 June 2023 and 31 December 2023 are shown with a 35% surplus charge.

A pension plan surplus is considered to be recoverable where an unconditional right to a refund exists.

We are continuing to work with the trustee on the long-term strategy for the plan, including steps relating to any residual surplus assets that remain after all plan related obligations are settled or otherwise provided for. The timing for implementing any strategy, including the release of any surplus, remains a matter for the trustee. See Note 31 in the Annual report and accounts 2023 for more information.

(c)      Principal assumptions

Determination of the valuation of principal plan liabilities is a key estimate as a result of the assumptions made relating to both economic and non-economic factors.

The key economic assumptions for the principal plan, which are based in part on current market conditions, are shown below:

	30 Jun 2024	30 Jun 2023	31 Dec 2023
	%	%	%
Discount rate	5.25	5.25	4.60
Rates of inflation
Consumer Price Index (CPI)	2.80	2.80	2.65
Retail Price Index (RPI)	3.15	3.15	3.00

The changes in economic assumptions over the period reflect changes in both corporate bond prices and market implied inflation. The underlying methodology used to set these key economic assumptions has not changed over the reporting period. The population of corporate bond prices excludes bonds issued by UK universities. The inflation assumption reflects the future reform of RPI effective from 2030.

The determination of the present value of the funded obligation at 30 June 2024 includes a methodology change for post-retirement pension increases on 'post 6th April 88' GMP pensions in the principal plan. The previous methodology used a deterministic approach in line with the relevant CPI index. The updated methodology allows for the contractual pension increase cap and floor when deriving the pension increase assumption, using an assumed CPI inflation volatility of 2% p.a. The impact of this methodology change is to reduce the closing obligation by c.£6m.

4.18 Provisions

	30 Jun 2024	30 Jun 2023	31 Dec 2023
	£m	£m	£m
Provisions
Separation costs	-	32	-
Tax related provisions	42	-	42
Other provisions	20	26	24
Total provisions	62	58	66

The separation cost provision recognised at 30 June 2023 of £32m was in respect of costs expected to be incurred following the sale of the UK and European insurance business to Phoenix. Following the completion of the separation programme during the 12 months ended 31 December 2023 the Group expected no further costs to be incurred and £32m was released from the provision.

The provision for a potential liability of £42m relates to a disputed tax matter which is the subject of an ongoing appeal. Any resolution is not expected to be until 2025 at the earliest. A reimbursement asset has been recognised within receivables and other financial assets for £18m (30 June 2023: £nil, 31 December 2023: £18m) which is an expected recovery in the event of any settlement.

4.19 Fair value of assets and liabilities

(a)      Fair value hierarchy

In determining fair value, the following fair value hierarchy categorisation has been used:

-   Level 1: Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market exists where transactions take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

-   Level 2: Fair values measured using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

-   Level 3: Fair values measured using inputs that are not based on observable market data (unobservable inputs).

Information on the methods and assumptions used to determine fair values for equity securities and interests in pooled investment funds, debt securities and derivatives measured at fair value is given below:

	Equities and interests in pooled investment funds1,2	Debt securities	Derivatives3
Level 1	Equity instruments listed on a recognised exchange valued using prices sourced from their primary exchange.	Debt securities listed on a recognised exchange valued using prices sourced from their primary exchange.	Exchange traded derivatives valued using prices sourced from the relevant exchange.
Level 2	Pooled investment funds where daily unit prices are available and reference is made to observable market data.	Debt securities valued using prices received from external pricing providers based on quotes received from a number of market participants.   Debt securities valued using models and standard valuation formulas based on observable market data4.	Over-the-counter derivatives measured using a range of valuation models including discounting future cash flows and option valuation techniques.
Level 3	These relate primarily to interests in private equity, real estate and infrastructure funds which are valued at net asset value. Underlying real estate and private equity investments are generally valued in accordance with independent professional valuation reports or International Private Equity and Venture Capital Valuation Guidelines where relevant. The underlying investments in infrastructure funds are generally valued based on the phase of individual projects forming the overall investment and discounted cash flow techniques based on project earnings.   Where net asset values are not available at the same date as the reporting date, the latest available valuations are reviewed and, where appropriate, adjustments are made to reflect the estimated impact of changes in market conditions between the date of the valuation and the end of the reporting period.   Other unlisted equity securities are generally valued using a calibration to the price of a recent investment.	Debt securities valued using prices received from external pricing providers based on a single broker indicative quote.   Debt securities valued using models and standard valuation formulas based on unobservable market data4.	N/A

1.  Investments in associates at fair value through profit or loss are valued in the same manner as the Group's equity securities and interests in pooled investment funds.

2.  Where pooled investment funds have been seeded and the investment in the funds have been classified as held for sale, the costs to sell are assumed to be negligible. The fair value of pooled investment funds held for sale is calculated as equal to the observable unit price.

3.  Non-performance risk arising from the credit risk of each counterparty is also considered on a net exposure basis in line with the Group's risk management policies. At 30 June 2024, 30 June 2023 and 31 December 2023, the residual credit risk is considered immaterial and no credit risk adjustment has been made.

4.  If prices are not available from the external pricing providers or are considered to be stale, the Group has established procedures to arrive at an internal assessment of the fair value.

The fair value of liabilities in respect of third party interest in consolidated funds and non-participating investment contracts are calculated equal to the fair value of the underlying assets and liabilities.

Thus, the value of these liabilities is dependent on the methods and assumptions set out above in relation to the underlying assets and liabilities:

-    For third party interest in consolidated funds, when the underlying assets and liabilities are valued using readily available market information the liabilities in respect of third party interest in consolidated funds are treated as level 2. Where the underlying assets and liabilities are not valued using readily available market information the liabilities in respect of third party interest in consolidated funds are treated as level 3.

-   For non-participating investment contracts, the underlying assets and liabilities are predominately categorised as level 1 or 2 and as such, the inputs into the valuation of the liabilities are observable and these liabilities are predominately categorised within level 2 of the fair value hierarchy. Where the underlying assets are categorised as level 3, the liabilities are also categorised as level 3.

In addition, contingent consideration assets and contingent consideration liabilities are also categorised as level 3 in the fair value hierarchy. Contingent consideration assets and liabilities have been recognised in respect of acquisitions and disposals. Generally valuations are based on unobservable assumptions regarding the probability weighted cash flows and, where relevant, discount rate.

(b)      Fair value hierarchy for assets and liabilities measured at fair value other than assets backing unit linked liabilities and unit linked liabilities

(b)(i)  Fair value hierarchy for assets measured at fair value in the statement of financial position other than assets backing unit linked liabilities

The table below presents the Group's non-unit linked assets measured at fair value by level of the fair value hierarchy (refer Section 4.19(c) for fair value analysis in relation to assets backing unit linked liabilities).

										Fair value hierarchy
	As recognised in the condensed consolidated statement of financial position			Classified as held for sale			Total			Level 1			Level 2			Level 3
	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Derivative financial assets	46	78	43	-	-	-	46	78	43	-	-	-	46	78	43	-	-	-
Equity securities and interests in pooled investment vehicles1	1,138	1,167	1,139	6	-	-	1,144	1,167	1,139	743	808	769	140	128	137	261	231	233
Debt securities2	735	734	740	-	-	-	735	734	740	6	2	7	728	731	732	1	1	1
Financial investments	1,919	1,979	1,922	6	-	-	1,925	1,979	1,922	749	810	776	914	937	912	262	232	234
Owner occupied property3	-	1	1	-	-	-	-	1	1	-	-	-	-	-	-	-	1	1
Contingent consideration assets4	21	24	11	-	-	-	21	24	11	-	-	-	-	-	-	21	24	11
Total assets at fair value	1,940	2,004	1,934	6	-	-	1,946	2,004	1,934	749	810	776	914	937	912	283	257	246

1.  Includes £542m (30 June 2023: £554m, 31 December 2023: £557m) for the Group's listed equity investment in Phoenix which is classified as a significant listed investment. The Group's listed equity investments in HDFC Asset Management and HDFC Life which were also classified as significant listed investments were sold in the six months ended 30 June 2023.

2.  There were no debt securities measured at amortised cost at 30 June 2024. Debt securities at fair value at 30 June 2023 and 31 December 2023 excluded debt securities measured at amortised cost of £101m and £125m respectively - refer Section 4.19(d).

3.  Presented in Property, plant and equipment in the condensed consolidated statement of financial position.

4.  Presented in Receivables and other financial assets in the condensed consolidated statement of financial position.

There were no significant transfers between level 1 and level 2 during the six months ended 30 June 2024 (six months ended 30 June 2023 and 12 months ended 31 December 2023: none). Transfers are deemed to have occurred at the end of the calendar quarter in which they arose.

Refer Section 4.19(b)(iii) below for details of movements in level 3.

(b)(ii) Fair value hierarchy for liabilities measured at fair value in the statement of financial position other than unit linked liabilities

The table below presents the Group's non-unit linked liabilities measured at fair value by level of the fair value hierarchy.

				Fair value hierarchy
	Total			Level 1			Level 2			Level 3
	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Liabilities in respect of third party interest in consolidated funds	206	212	187	-	-	-	137	141	117	69	71	70
Derivative financial liabilities	4	2	9	1	1	7	3	1	2	-	-	-
Contingent consideration liabilities1	100	129	114	-	-	-	-	-	-	100	129	114
Other financial liabilities2	13	16	15	-	-	-	-	-	-	13	16	15
Total liabilities at fair value	323	359	325	1	1	7	140	142	119	182	216	199

1.  Presented in Other financial liabilities in the condensed consolidated statement of financial position.

2.  Excluding contingent consideration liabilities.

There were no significant transfers between level 1 and level 2 during the six months ended 30 June 2024 (six months ended 30 June 2023 and 12 months ended 31 December 2023: none).

Refer Section 4.19(b)(iii) below for details of movements in level 3.

(b)(iii)   Reconciliation of movements in level 3 instruments

The movements during the period of level 3 assets and liabilities held at fair value, excluding unit linked assets and liabilities and assets and liabilities held for sale, are analysed below.

	Owner occupied property			Equity securities and interests in pooled investment funds			Debt securities			Liabilities in respect of third party interest in consolidated funds
		30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023
		£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At start of period	1	1	1	233	231	231	1	2	2	(70)	(74)	(74)
Total gains recognised in the condensed consolidated income statement	-	-	-	3	1	1	-	-	-	-	-	-
Purchases	-	-	-	28	7	18	-	-	-	-	-	-
Sales and other adjustments	(1)	-	-	(2)	(2)	(17)	-	(1)	(1)	1	3	4
Foreign exchange adjustment	-	-	-	(1)	(6)	-	-	-	-	-	-	-
At end of period	-	1	1	261	231	233	1	1	1	(69)	(71)	(70)

 

	Contingent consideration assets			Contingent consideration liabilities			Other financial liabilities1
	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023
	£m	£m	£m	£m	£m	£m	£m	£m	£m
At start of period	11	19	19	(114)	(132)	(132)	(15)	(11)	(11)
Total amounts recognised in the condensed consolidated income statement	2	7	7	10	(2)	16	2	(5)	(5)
Additions	10	-	7	-	-	(11)	-	-	-
Settlements	(2)	(2)	(21)	4	4	12	-	-	1
Other movements	-	-	(1)	-	1	1	-	-	-
At end of period	21	24	11	(100)	(129)	(114)	(13)	(16)	(15)

1.  Excluding contingent consideration liabilities.

For the six months ended 30 June 2024, gains of £17m (six months ended 30 June 2023: gains of £1m, 12 months ended 31 December 2023: gains of £19m) were recognised in the condensed consolidated income statement in respect of non-unit linked assets and liabilities held at fair value classified as level 3 at the period end, excluding assets and liabilities held for sale. All gains were recognised in Net gains or losses on financial instruments and other income.

Transfers of equity securities and interests in pooled investment funds and debt securities into level 3 generally arise when external pricing providers stop providing a price or where the price provided is considered stale. Transfers of equity securities and interests in pooled investment funds and debt securities out of level 3 arise when acceptable prices become available from external pricing providers.

(b)(iv)   Significant unobservable inputs in level 3 instrument valuations

The table below identifies the significant unobservable inputs in relation to equity securities and interests in pooled investment funds categorised as level 3 instruments at 30 June 2024 with a fair value of £261m (30 June 2023: £231m, 31 December 2023: £233m).

	Fair value
	30 Jun 2024 £m	30 Jun 2023 £m	31 Dec 2023 £m	Valuation technique	Unobservable input		Range (weighted average)
Private equity, real estate, hedge and infrastructure funds	249	219	221	Net asset value	Net asset value statements provided for ten significant funds (fair value >£5m) and a large number of smaller funds		A range of unobservable inputs is not applicable as we have determined that the reported NAV represents fair value at the end of the reporting period
Other unlisted equity securities	12	12	12	Indicative share price	Calibration to the price of a recent investment.		A range of unobservable inputs is not applicable as we have determined that the calibration to the price of a recent investment represents fair value at the end of the reporting period.

The unobservable input for the Group's related liabilities in respect of third party interest in consolidated funds categorised as level 3 instruments at 30 June 2024 with a fair value of £(69)m (30 June 2023: £(71)m, 31 December 2023: £(70)m) are the same as for the private equity, real estate, hedge and infrastructure funds above. There are no single significant funds in relation to liabilities in respect of third party interest in consolidated funds.

The table below identifies the significant unobservable inputs in relation to contingent consideration assets and liabilities and other financial instrument liabilities categorised as level 3 instruments at 30 June 2024 with a fair value of £(92)m (30 June 2023: £(121)m, 31 December 2023: £(118)m).

	Fair value
	30 Jun 2024 £m	30 Jun 2023 £m	31 Dec 2023 £m	Valuation technique	Unobservable input	Range (weighted average)
Contingent consideration assets and liabilities and other financial instrument liabilities	(92)	(121)	(118)	Probability weighted cash flow and where applicable discount rates	Unobservable inputs relate to probability weighted cash flows and, where relevant, discount rates. The most significant unobservable inputs relate to assumptions used to value the contingent consideration liability related to the acquisition of Tritax of £82m (30 June 2023: £109m, 31 December 2023: £90m). For Tritax a number of scenarios were prepared, around a base case, with probabilities assigned to each scenario (based on an assessment of the likelihood of each scenario). The scenarios allow for adjustments to the profit used to determine the contingent consideration under the sale purchase agreement. The value of the contingent consideration was determined for each scenario, and these were then probability weighted, with this probability weighted valuation then discounted from the payment date to the balance sheet date. It was assumed that the timing of the exercise of the earn out put options between 2024, 2025 and 2026 would be that which is most beneficial to the holders of the put options.	The base scenario for Tritax contingent consideration used a revenue compound annual growth rate (CAGR) from 31 March 2023 to 31 March 2026 of 9% (30 June 2023: CAGR from 31 March 2022 to 31 March 2026 of 14% and 31 December 2023: CAGR from 31 March 2023 to 31 March 2026 of 9%) with other scenarios using a range of revenue growth assumptions around this base. The base scenario used a cost/income ratio of c57% (30 June 2023: c52% and 31 December 2023: c56%) with other scenarios using a range of cost/income ratios around this base. The risk adjusted contingent consideration cash flows have been discounted using a primary discount rate of 4% (30 June 2023: 5% and 31 December 2023: 4%).

(b)(v)    Sensitivity of the fair value of level 3 instruments to changes in key assumptions

At 30 June 2024, the shareholder is directly exposed to movements in the value of all non-unit linked level 3 instruments. Refer Section 4.19(c) for unit linked level 3 instruments.

Sensitivities for material level 3 assets and liabilities are provided below. Changing unobservable inputs in the measurement of the fair value of the other level 3 financial assets and financial liabilities to reasonably possible alternative assumptions would not have a material impact on profit attributable to equity holders or on total assets.

(b)(v)(i) Equity securities and interests in pooled investment funds

As noted above, of the level 3 equity securities and interests in pooled investment funds, £249m relates to private equity, real estate, hedge and infrastructure funds (30 June 2023: £219m, 31 December 2023: £221m) which are valued using net asset value statements. A 10% increase or decrease in the net asset value of these investments would increase or decrease the fair value of the investments by £25m.

(b)(v)(ii) Liabilities in respect of third party interest in consolidated funds

As noted above, £69m of liabilities in respect of third party interest in consolidated funds of the level 3 equity securities and interests in pooled investment funds (30 June 2023: £71m, 31 December 2023: £70m) are also valued using net asset value statements. A 10% increase or decrease in the net asset value of these investments would increase or decrease the fair value of the liability by £7m.

(b)(v)(iii) Contingent consideration assets and liabilities and other financial instrument liabilities

As noted above, the most significant unobservable inputs for level 3 instruments relate to assumptions used to value the contingent consideration related to the purchase of Tritax. Sensitivities for reasonably possible changes to key assumptions are provided in the table below.

Assumption	Change in assumption	Consequential increase/(decrease) in contingent consideration liability
		30 Jun 2024 £m
Revenue compound annual growth rate (CAGR) from 31 March 2023 to 31 March 2026	Decreased by 5%	(14)
	Increased by 10%	33
Cost/income ratio	Decreased by 5%	13
	Increased by 5%	(13)
Discount rate	Decreased by 2%	3
	Increased by 2%	(3)

(c)      Fair value hierarchy for assets backing unit linked liabilities and unit linked liabilities measured at fair value

The table below presents the Group's assets backing unit linked liabilities and unit linked liabilities measured at fair value by level of the fair value hierarchy.

	Total			Fair value hierarchy
				Level 1			Level 2			Level 3
	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024	30 Jun 2023	31 Dec  2023
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Financial investments	655	873	669	362	590	396	293	283	273	-	-	-
Total assets at fair value backing unit linked liabilities	655	873	669	362	590	396	293	283	273	-	-	-
Investment contract liabilities	670	724	684	-	-	-	670	724	684	-	-	-
Third party interest in consolidated funds	-	165	-	-	-	-	-	165	-	-	-	-
Other unit linked liabilities1	-	1	-	-	-	-	-	1	-	-	-	-
Total unit linked liabilities at fair value	670	890	684	-	-	-	670	890	684	-	-	-

1.  Excludes other unit linked liabilities not measured at fair value of £8m (30 June 2023: £4m, 31 December 2023: £2m).

The financial investments backing unit linked liabilities comprise equity securities and interests in pooled investment funds of £652m (30 June 2023: £764m, 31 December 2023: £667m), debt securities of £3m (30 June 2023: £107m, 31 December 2023: £2m) and derivative financial assets of £nil (30 June 2023: £2m, 31 December 2023: £nil).

There were no significant transfers between level 1 and level 2 during the six months ended 30 June 2024 (six months ended 30 June 2023 and 12 months ended 31 December 2023: none).

The movements during the period of level 3 unit linked assets and liabilities held at fair value are analysed below.

	Equity securities and interests in pooled investment funds				Investment contract liabilities
	30 Jun 2024	30 Jun 2023	31 Dec  2023	30 Jun 2024		30 Jun 2023	31 Dec  2023
	£m	£m	£m	£m		£m	£m
At start of period	-	1	1	-		(1)	(1)
Sales	-	(1)	(1)	-		1	1
At end of period	-	-	-	-		-	-

Unit linked level 3 assets related to holdings in real estate funds.

(d)      Assets and liabilities not carried at fair value

The table below presents estimated fair values of non-unit linked financial assets and liabilities whose carrying value does not approximate fair value. Fair values of assets and liabilities are based on observable market inputs where available or are estimated using other valuation techniques.

	As recognised in condensed consolidated statement of financial position line item			Fair value
	30 Jun 2024	30 Jun 2023	31 Dec 2023	30 Jun 2024	30 Jun 2023	31 Dec 2023
	£m	£m	£m	£m	£m	£m
Assets
Debt securities	-	101	125	-	101	125
Liabilities
Subordinated liabilities	604	588	599	555	515	534

The estimated fair values for subordinated liabilities are based on the quoted market offer price. The carrying value of all other financial assets and liabilities measured at amortised cost approximates their fair value.

4.20 Contingent liabilities and contingent assets

Legal proceedings, complaints and regulations

The Group is subject to regulation in all of the territories in which it operates investment management, asset administration  and insurance businesses. In the UK, where the Group primarily operates, the FCA has broad powers, including powers to investigate marketing and sales practices.

The Group, like other financial organisations, is subject to legal proceedings, complaints and regulatory and tax authority discussions and reviews in the normal course of its business. All such material matters are periodically reassessed, with the assistance of external professional advisers where appropriate, to determine the likelihood of the Group incurring a liability. Where it is concluded that it is more likely than not that a material outflow will be made a provision is established based on management's best estimate of the amount that will be payable. A subsidiary of the Group is currently responding to certain information requests from an overseas Tax Authority in connection with its Income Tax Returns. Interpretation of tax legislation is complex and therefore, as part of the normal course of business, local tax authorities may sometimes request further information in order to clarify facts and technical approach. These types of enquiries can sometimes be prolonged due to inherent complexity. At this stage of enquiry, it is not possible to reliably predict the outcome.

There are no other identified contingent liabilities expected to lead to a material exposure.

4.21 Commitments

(a)      Unrecognised financial instruments

As at 30 June 2024, the Group has committed to investing an additional £52m (30 June 2023: £74m, 31 December 2023: £67m) into funds in which it holds a co-investment interest.

(b)      Capital and other commitments

As at 30 June 2024, the Group has no capital commitments other than in relation to financial instruments (30 June 2023: £nil, 31 December 2023: £nil).

In addition, the Group has commitments relating to future acquisitions:

-    In February 2021, the Group announced the purchase of certain products in Phoenix's savings business offered through abrdn's Wrap platform, comprising a self-invested pension plan (SIPP) and an onshore bond product; together with Phoenix's trustee investment plan business for UK pension scheme clients. The transfers to the Group of the majority of the SIPP contracts and the TIP business are expected to be completed during 2025, subject to regulatory and court approvals. The upfront consideration paid by the Group in February 2021 was £62.5m, which is offset in part by payments from Phoenix to the Group relating to profits of the products prior to completion of the legal transfer. The net amount of consideration paid is included in prepayments in the condensed consolidated statement of financial position with cash movements in relation to the consideration included in prepayment in respect of potential acquisition of customer contracts in the condensed consolidated statement of cash flows. Refer Note 4.14 for details of the release of the prepayments to expenses in the six months ended 30 June 2024.

-    At 30 June 2024, the Group had other commitments for the cost of obtaining customer contracts for £22m. These commitments were subject to the satisfaction of certain conditions.

4.22 Related party transactions

In the normal course of business, the Group enters into transactions with related parties that relate to investment management and insurance businesses. There have been no changes in the nature of these transactions during the period to those reported in the Annual report and accounts for the year ended 31 December 2023. There were no transactions with related parties during the six months ended 30 June 2024 which had a material effect on the results or financial position of the Group.

4.23 Events after the reporting period

On 2 July 2024, the Group completed the sale of its adviser support services business, threesixty services, to the Fintel group. The threesixty services business was reported within our Adviser segment. The sale involved the transfer of 70 employees and resulted in an IFRS profit on disposal of subsidiaries and other operations of £9m which will be recognised in the second half of 2024.