Schroders managed to attract net inflows of £2.7bn in the first half of the year. But profits were still down, mainly due to a switch by clients into more defensive lower-margin mandates, which cut asset management fee income by 10 per cent to £631.9m and private banking fee income by 9 per cent to £49.1m. And, given the tough trading climate, there is no obvious catalyst for a re-rating.
Net institutional inflows amounted to £1.9bn, and assets under management rose from £108.4bn to £113.3bn. And, despite the wider economic uncertainty, retail investor demand still produced net inflows of £1bn, taking assets up from £62.9bn to £65.3bn. But the overall 4 per cent increase in assets under management, to £194.6bn, came largely from a positive investment performance in the first quarter, a trend that was reversed in the second quarter when Schroders suffered negative investment returns of £6.1bn.
On the private banking side, margins were squeezed by a fall in transaction volumes. And, while assets under management were flat at £16bn, there was a small £200m net outflow of funds.
Broker Peel Hunt expects to downgrade full-year forecasts by 5-8 per cent to nearer £369m of pre-tax profits and EPS of 99p (from £407.3m and 111.9p in 2011).
| SCHRODERS (SDR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,315p | MARKET VALUE: | £3.57bn* | |
| TOUCH: | 1,312-1,315p | 12-MONTH HIGH: | 1,669p | LOW: 1,155p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 686p* | |||
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2011 | 216 | 60.7 | 13.0 |
| 2012 | 177 | 50.7 | 13.0 |
| % change | - | - | - |
Ex-div: 15 Aug Payment: 27 Sep *Includes non-voting shares | |||
