Schroders confident despite fall in profits

2nd Mar 2023 07:47

(Sharecast News) - Asset manager Schroders reported a net operating revenue increase of 1% in its final results on Thursday, excluding performance-related fees, to £2.32bn.

The FTSE 100 company said operating profit was "robust" at £723m, down 14% year-on-year, amid challenging market conditions and lower performance fees.

Its statutory pre-tax profit of £586.9m was down 23%, having been impacted by mark-to-market movements on balance sheet items and acquisition-related costs, including amortisation.

The firm's three-year investment performance key performance indicator remained strong, with 73% of assets outperforming.

Schroders Capital, the company's private assets business, achieved record fundraising of £17.5bn in the year.

Additionally, the wealth management advice businesses delivered strong organic growth of 6.6%.

Net new business remained "resilient" at -£1.6bn, excluding joint ventures and associates, given a volatile fourth quarter.

The company reported a positive start to 2023, particularly in Schroders Solutions.

Schroders' board has recommended a final dividend of 15p per share, making for a total dividend of 21.5p per share for 2022, up marginally from 21.4p.

"The market challenges of 2022 provided a stress test for our strategy," said group chief executive officer Peter Harrison.

"I am encouraged by our resilient performance and that our strategy is working.

"The businesses we have been building in recent years - across wealth management, private assets and solutions - performed strongly."

Harrison said they were all playing an "increasingly important part" in the firm's growth, and now represented 53% of assets under management.

"Schroders Capital, our private assets business, had a record year with £17.5bn of fundraising, with particular strength in real estate and private equity.

"Despite the market dynamics, our wealth management advice businesses had a good year, delivering strong organic growth of 6.6%, while we also continued to build scale in Schroders Solutions.

"Our strength more broadly is underpinned by our approach to sustainability."

Schroders was an early investor in environment, social and governance (ESG), Peter Harrison said, alongside the technology that underpins its capabilities in the area.

"This has proven to be the right decision and we will continue to invest in 2023 and beyond.

"2023 has started positively, particularly in Schroders Solutions.

"We are confident about our trajectory - our clients require broad, actively-managed solutions and we have built the capability to meet that need."

At 0928 GMT, shares in Schroders were down 3.26% at 483.9p.

Reporting by Josh White for Sharecast.com.