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Schroders reports higher profits but shares fall as assets under management miss forecasts

Schroders said it delivered robust revenue growth against a "challenging backdrop"

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Schroders says it is "confident that we can generate growth through the cycle"

Schroders PLC (LON:SDR) reported a 9% increase in first-half adjusted profits but shares fell as assets under management disappointed investors. 

Profit before tax, excluding exceptional items, rose to £397.1mln in the six months ended June 30 from £361.5mln a year ago, beating market forecasts of £379mln. 

On a reported basis, pre-tax profit rose 8% to £371.1mln from £342.8mln.

Assets under management stood at £435.7mln at the end of the period, unchanged from the start of the year, missing analysts' expectations of £427bn. 

Assets under management and administration in the period rose to £449.4mln from £447.0mln last year as inflows from North American clients and multi-asset strategies mitigated outflows in Europe and from equity markets.

Net inflows came to £1.2bn, compared to £0.8bn last year.

READ: Schroders reports quarterly decline in funds under management

Net income before exceptional items increased to £1.09bn from £974.4mln, boosted by a carried interest of £19.6mln, while performance fees edged up to £16.1mln from £13.8mln.

CEO sounds confident outlook 

“Against a challenging backdrop we have delivered robust revenue growth through our strategy of focusing on new markets and by continuing to evolve our products and solutions,” said chief executive Peter Harrison.

“Wealth Management has seen strong client demand and we have continued to expand our capabilities within Private Assets and Alternatives, offsetting industry headwinds in other areas. “

He added: “We remain confident that we can generate growth through the cycle and that we are well placed to continue to create value for our clients and shareholders over the long term."

The company raised its interim dividend to 35p per share from 34p a year ago.

Shares fall as AuM and dividend disappoint 

Shares fell 1.9% to 3,160p in morning trading. 

Numis said adjusted pre-tax profit was £20mln ahead of its expectations of but assets under management was below its forecast of £449bn, reflecting a "disappointing" half for net flows and weaker than anticipated investment performance. 

"The dividend per share at 35p was also a little disappointing compared to our estimate 38p and consensus 36p, with the +1p year-on-year increase presumably reflecting company caution given the relatively weak net flows."

Quick facts: Schroders

Price: 3022 GBX

LSE:SDR
Market: LSE
Market Cap: £8.54 billion
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