Scan through Schroders’ (SDR) 2020 results, and you might wonder why the active manager failed to grow profits in a year in which assets under management climbed 23 per cent to £500bn.
The reason for the apparent discrepancy, explained chief financial officer Richard Keers, is that the bulk of the £43.4bn-worth of annual net flows landed at the end of the calendar, as part of the gradual on-boarding of assets managed for Scottish Widows, the insurer owned by Lloyds Banking Group (LLOY).
In total, £44.6bn-worth of flows came from the monster mandate, thus preventing another year of net outflows. And another £30bn should be transfer over by June, meaning that revenues are likely to jump at the half-year mark, all things being equal.
Of course, all things won’t be equal after the sharp recent drop in equity markets. In his near-term outlook, chief executive Peter Harrison said he expects the Covid-19 outbreak to create “considerable uncertainty for economies and markets”, but is confident his business’s resilience can weather the crisis. Volatility in investor flows in recent weeks has not been “significant”, says Mr Keers.
Analysts at Numis forecasts earnings of 211p per share in 2020, rising to 224p in 2021.
| SCHRODERS (SDR) | |||||
| ORD PRICE: | 2,799p | MARKET VALUE: | £7.8bn | ||
| TOUCH: | 2,798-2,800p | 12-MONTH HIGH: | 3,465p | LOW: | 2,508p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 16 | ||
| NET ASSET VALUE: | 1,385p* | NET CASH: | £2.2bn** | ||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 2.04 | 589 | 171 | 87 |
| 2016 | 2.14 | 618 | 178 | 93 |
| 2017 | 2.51 | 760 | 216 | 113 |
| 2018 | 2.63 | 650 | 183 | 114 |
| 2019 | 2.54 | 625 | 179 | 114 |
| % change | -3 | -4 | -2 | - |
| Ex Div: | 26-Mar | |||
| Payment: | 13-Jul | |||
| *Includes intangible assets of £1.1bn or 408p per share | ||||
| **Includes lease liabilies of £425m | ||||
