With the fortunes of asset managers highly correlated to the wax and wane of investor sentiment, it is no surprise that companies in the sector have endured some of the worst deterioration in both share price and profitability during the past six months. However, Schroders ' (SDR) strategy of increasing the proportion of business coming from institutional investors cushioned some of the blow from rocky markets and retail investors' referendum-related jitters during the first half.
Group assets under management grew to £344bn, up about £34bn on 2015's figure. However £28.5bn of this gain came via the weakness of sterling. The asset management business benefited from the more stable mandates issued by institutional investors, with its institutional channel gaining £4.4bn in net inflows to £204bn in assets under management. Chief financial officer Richard Keers reported continuing strong demand for multi-asset and fixed-income strategies from institutional investors such as pension schemes in the UK and Europe.
This was partially offset by £3.3bn in net outflows from intermediaries, as retail investors in the UK and Asia became more wary of volatile markets. What's more, the shift towards more institutional business chipped 2 basis points off the net operating revenue margin to 47 basis points.
Analysts at Numis expect adjusted pre-tax profit of £616m and EPS of 174p (up from £610m and 172p in 2015).
SCHRODERS (SDR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,589p | MARKET VALUE: | £7.3bn | |
| TOUCH: | 2,587-2,590p | 12-MONTH HIGH: | 3,213p | LOW: 1,960p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 1,037p* | |||
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 1.03 | 290 | 84.0 | 29 |
| 2016 | 1.00 | 282 | 81.1 | 29 |
| % change | -3 | -3 | -3 | - |
Ex-div: 18 Aug Payment: 22 Sep *Includes non-voting shares | ||||
