Schroders kept profits flat in 2011 - not bad in volatile trading conditions - and attracted net inflows of £3.2bn. But equity market weakness left assets under management down 5 per cent at £187.3bn, while the shares - which have risen strongly since January - lack obvious catalysts for further upside.
The underlying picture demonstrated the tough trading environment faced by the group. Net institutional inflows fell sharply from £16.8bn to £6.8bn, which left institutional assets up just £2bn at £108.4bn. More worryingly, retail business, which typically attracts higher margins, suffered net outflows of £3.8bn - reversing £7.9bn of net inflows in 2010. Furthermore, net revenue margins fell from 59 basis points to 56 basis points. And while management fees rose from £1.16bn to £1.27bn, performance fees fell from £73.4m to £37.8m.
On the private banking side, net new business was down sharply on 2010's £2.4bn to just £0.2bn, and assets under management were roughly static at £16bn. However, with no repeat of the previous year's doubtful debt charge, divisional pre-tax profits recovered from £10.1m to £23.8m.
Numis Securities expects 2012 pre-tax profits of £400m, giving EPS of 108.2p.
| SCHRODERS (SDR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,549p | MARKET VALUE: | £4.19bn* | |
| TOUCH: | 1,549-1,551p | 12-MONTH HIGH: | 1,936p | LOW: 1,155p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 674p* | |||
| Year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2007 | 393 | 105 | 26.5 |
| 2008 | 123 | 27.5 | 31.0 |
| 2009 | 138 | 34.3 | 31.0 |
| 2010 | 407 | 112 | 37.0 |
| 2011 | 407 | 116 | 39.0 |
| % change | - | +4 | +5 |
Ex-div: 28 Mar Payment: 11 May *Includes non-voting shares | |||
