Diversification was the name of the game for Schroders (SDR) in 2017, one that led to a consensus-beating bottom line, together with a surge in net inflows to £9.6bn – up from just £1.1bn in the previous year. Along with market returns, that took assets under management to £447bn, a 13 per cent uplift year on year.
While institutional assets continued to make up the majority of new business, retail inflows were £3.4bn, compared with net outflows of £2.9bn in 2016. The asset management titan increased its higher-margin private asset and alternatives business by acquiring Switzerland-based private equity manager Adveq, following increased client demand for these types of assets. The deal effectively offset outflows from the equity strategies segment, resulting in a flat institutional net operating revenue margin of 0.32 percentage points. Private assets and alternatives stood at £33bn at the year-end, up more than a third. It also expanded its distribution in mainland China and North America.
The wealth management business acquired the discretionary client assets of UK private bank C Hoare & Co, as well as benefiting from a full year’s contribution from Benchmark Capital. Wealth management assets rose 16 per cent to £46bn, with organic inflows of £2bn.
Analysts at Numis expect adjusted pre-tax profits of £750m for the 12 months to December 2018, giving EPS of 215p (down from £800m and 222p in 2017).
| SCHRODERS (SDR) | ||||
| ORD PRICE: | 3,466p | MARKET VALUE: | £9.24bn | |
| TOUCH: | 3,465-3,466p | 12-MONTH HIGH: | 3,784p | LOW: 3,006p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 1229p* | |||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
| 2013 | 1.81 | 448 | 131 | 58 |
| 2014 | 1.92 | 517 | 153 | 78 |
| 2015 | 2.04 | 589 | 171 | 87 |
| 2016 | 2.14 | 618 | 178 | 93 |
| 2017 | 2.51 | 760 | 215 | 113 |
| % change | +17 | +23 | +21 | +22 |
| Ex-div: | 22 Mar | |||
| Payment: | 03 May | |||
| *Includes intangible assets of £826m, or 292p a share | ||||
