Diversification continues to be the buzzword for Schroders (SDR) in a tough market for growth assets. Outgoing chief executive Michael Dobson - who is skirting City best practice to become its non-executive chairman - reiterated the group's increased focus on multi-asset and fixed income strategies, and institutional clients. These areas generally provide either big mandates, good longevity, or both, and the manager grew its assets under management from £300bn to £314bn over the period. But they are also less profitable, and this change to the mix conspired with downward pressure on fees to knock 2 basis points off the group's net revenue margins.
The group's core asset management division won net inflows of £13bn last year, down from £25bn in 2014. Its institutional division gained £8.8bn of net new business, predominately into fixed income and multi-asset strategies. However, the group's wealth management business suffered £100m in net outflows due to weaker market conditions in the second half of the year. Total new business was £13bn, taking funds under management up to £314bn.
Management says so far in 2016 the group has seen good inflows into institutional business, partially offset by outflows in its intermediary business.
Analysts at Numis Securities expect adjusted pre-tax profit of £606m in 2016, giving EPS of 171p, compared with 172p in 2015.
SCHRODERS (SDR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,761p | MARKET VALUE: | £7.44bn* | |
| TOUCH: | 2,760-2,762p | 12-MONTH HIGH: | 3,441p | LOW: 2,320p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 990p* | |||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.50 | 407 | 116 | 39 |
| 2012 | 1.43 | 360 | 105 | 43 |
| 2013 | 1.81 | 448 | 131 | 58 |
| 2014 | 1.92 | 517 | 153 | 78 |
| 2015 | 2.04 | 589 | 171 | 87 |
| % change | +6 | +14 | +12 | +12 |
Ex-div: 24 Mar Payment: 5 May *Includes non-voting shares | ||||
