Chairman and CIO stepping down at Schroders

8th Mar 2012 07:15

Chairman Michael Miles is calling time on his career at asset management firm Schroders, while Chief Investment Officer Alan Brown is also giving up his role and stepping down from the board, though he will remain with the company, operating as a senior adviser.Miles will be succeeded by Andrew Beeson, currently the senior independent director on the Schroders board.The news came as Schroders issued full year results which topped expectations, but which also revealed a precipitous decline in net new business.Revenue in 2011 rose to £1,502m from £1,439m in 2010. Net revenue, which excludes the cost of sales and net gains on financial instruments and other income, was more or less unchanged at £1,153m from £1,156m the year before. Profit before tax rose to £407.3m in 2011 from £406.9m, ahead of market expectations of a figure of £401m. Earnings per share (EPS) came in at 115.9p, versus the consensus market forecast of 108.9p, and up from 111.8p the year before. Assets under management (AUM) at the end of 2011 stood at £187.3bn, down from £196.7bn a year earlier. The funds saw net inflows of £3.2bn, down from net inflows in 2010 of £27.1bn."We saw high levels of net new business in multi-asset strategies, and in equities despite the market environment," the company statement revealed. AUM on behalf of institutional clients ended the year at £108.4 bn (2010: £106.4 bn). Retail investor demand was affected by growing concerns over the macro-economic environment and equity market volatility, however. As a result, gross sales in Schroders' Intermediary business declined, and for the year as a whole the firm's retail business saw net outflows of £3.8bn (2010: net inflows £7.9bn). Assets under management in Intermediary ended the year at £62.9bn (2010: £74.1 bn).The private banking business had a much better 2011 than 2010, in the absence of doubtful debt charges. Net revenue increased to £114.3m (2010: £103.3 m) and profit before tax more than doubled to £23.8m (2010: £10.1m). Net new business was £0.2bn (2010: £2.4 bn) and assets under management ended the year at £16.0bn (2010: £16.2bn).The full-year dividend has been nudged up to 39p (consensus forecast: 39.6p) from 37p."Since the year end, the tone in markets has improved as investors have seen signs of progress in the resolution of some of the problems of the Eurozone. Retail investor demand has recovered somewhat and we have generated positive net flows in both Institutional and Intermediary. However, financial markets are likely to remain volatile as the process of reducing government debt will be a long one and economic growth will remain subdued," the company said.jh