Diversification was again a strength for asset manager Schroders (SDR) last year. Volatile equities and macroeconomic uncertainty spooked retail investors, who pulled money from the asset manager, resulting in net outflows of £2.9bn from the intermediary business. However, its skew towards institutional assets meant business coming in continued to outweigh withdrawals.
Net inflows from institutional investors, typically larger mandates that are less influenced by short-term market fluctuations, were £4.3bn, led by fixed income strategies. This meant overall the asset management business gained £1.4bn in new money overall. However, it was investment returns and positive currency effects that delivered the real kicker to assets under management and administration, which were up more than a quarter to £397bn by the end of December. The acquisition of technology-led adviser Benchmark Capital contributed £11bn to the new 'administration' side of that metric.
In response to more clients seeking higher returns in direct lending, Schroders bought a 25 per cent stake in Neos, a Dutch company that provides institutional investors with access to debt financing for small- and medium-sized businesses. However, investors looking elsewhere than the public markets also meant the wealth management business suffered £0.3bn in net outflows.
Analysts at Numis expect adjusted pre-tax profit of £723m for the 12 months to December 2017, giving EPS of 207p (from £645m and 182p in 2016).
SCHRODERS (SDR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,078p | MARKET VALUE: | £8.23bn | |
| TOUCH: | 3,078-3,086p | 12-MONTH HIGH: | 3,183p | LOW: 1,960p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 1,109p* | |||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.43 | 360 | 105 | 43 |
| 2013 | 1.81 | 448 | 131 | 58 |
| 2014 | 1.92 | 517 | 153 | 78 |
| 2015 | 2.04 | 589 | 171 | 87 |
| 2016 | 2.14 | 618 | 178 | 93 |
| % change | +5 | +5 | +4 | +7 |
Ex-div: 30 Mar Payment: 4 May *Includes non-voting shares | ||||
