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Schroders beats on full-year AuM, but sees heightened near-term uncertainty
5th Mar 2020 07:45
(Sharecast News) - Schroders managed to edge past analysts' estimates for its full-year growth in assets under management but sounded a cautious note on the near-term outlook due to the uncertainty around how quickly the China coronavirus would be contained.
The fund manager reported a 23% rise in assets under management for 2019 to reach a record £500.2bn (UBS: £498bn), but net income was nearly flat versus the prior year at £2,124.8m so that rising costs pushed its profit before tax, excluding exceptionals, lower by 8% to £701.2m.
Basic earnings per share on that same basis declined 7% to 201.6p.
"In the near term, Covid-19 is creating considerable uncertainty for economies and markets. We believe that our business resilience is sufficient to deal with this, but the impact on economies and markets will be highly correlated with how effective containment measures are."
However, on longer time horizons management said the firm was "well placed to generate growth" thanks to its focused strategy, global footprint and diversified business.
"We see a range of growth opportunities particularly in our Wealth Management, Private Assets & Alternatives and Solutions business areas," it added.
Net inflows for the year were £43.4bn against £9.5bn of net outflows in 2018, including £32.0bn from the transfer of the Scottish Widows mandate (UBS: £40bn) and £12.6bn of inflows into the recently launched Schroders Personal Wealth.
As part of the October 2018 agreement to create a joint-venture in wealth management with Lloyds, the lender awarded Schroders a mandate to serve as active manager for approximately £80bn of assets from Scottish Widows and Lloyds insurance.
The remaining roughly £30bn from the Scottish Widows mandate were expected to fund through the first half of 2020.
Excluding the net inflows from the relationship with Lloyds Banking Group, Schroders registered full-year net outflows of £1.2bn.
In its Solutions business, AuM jumped 49% to £142.8bn, with Schroders crediting continued increased client demand for more than just components for their investment products, while in Wealth Management they rose by 53% to £66.7bn and at its Institutional arm by 7.1% to £144.1bn, but in Mutual funds they declined 7.7% to £102.4bn.
Combined, Wealth Management, Private Assets & Alternatives and Solutions accounted for over half of the grouyp's AuM, Schroders said.
The fund manager reported a 23% rise in assets under management for 2019 to reach a record £500.2bn (UBS: £498bn), but net income was nearly flat versus the prior year at £2,124.8m so that rising costs pushed its profit before tax, excluding exceptionals, lower by 8% to £701.2m.
Basic earnings per share on that same basis declined 7% to 201.6p.
"In the near term, Covid-19 is creating considerable uncertainty for economies and markets. We believe that our business resilience is sufficient to deal with this, but the impact on economies and markets will be highly correlated with how effective containment measures are."
However, on longer time horizons management said the firm was "well placed to generate growth" thanks to its focused strategy, global footprint and diversified business.
"We see a range of growth opportunities particularly in our Wealth Management, Private Assets & Alternatives and Solutions business areas," it added.
Net inflows for the year were £43.4bn against £9.5bn of net outflows in 2018, including £32.0bn from the transfer of the Scottish Widows mandate (UBS: £40bn) and £12.6bn of inflows into the recently launched Schroders Personal Wealth.
As part of the October 2018 agreement to create a joint-venture in wealth management with Lloyds, the lender awarded Schroders a mandate to serve as active manager for approximately £80bn of assets from Scottish Widows and Lloyds insurance.
The remaining roughly £30bn from the Scottish Widows mandate were expected to fund through the first half of 2020.
Excluding the net inflows from the relationship with Lloyds Banking Group, Schroders registered full-year net outflows of £1.2bn.
In its Solutions business, AuM jumped 49% to £142.8bn, with Schroders crediting continued increased client demand for more than just components for their investment products, while in Wealth Management they rose by 53% to £66.7bn and at its Institutional arm by 7.1% to £144.1bn, but in Mutual funds they declined 7.7% to £102.4bn.
Combined, Wealth Management, Private Assets & Alternatives and Solutions accounted for over half of the grouyp's AuM, Schroders said.