Schroders H1 results ‘satisfactory’
Against a background of quieter markets and some slowdown in investor demand following the strong performance of 2013, Schroders produced what the company regards as satisfactory results in H1 2014.
Net revenue was up 13 per cent to GBP728.6 million (H1 2013: GBP645.1 million) and profit before tax and exceptional items was up 15 per cent to GBP261.5 million (H1 2013: GBP228.0 million).
The strength of sterling over the past 12 months had an adverse impact on profit before tax of approximately GBP18.0 million.
Net inflows were GBP4.8 billion taking assets under management at the end of June to a record GBP271.5 billion (30 June 2013: GBP235.7 billion).
Asset management net revenue increased six per cent to GBP621.0 million (H1 2013: GBP585.7 million) and included performance fees of GBP8.3 million (H1 2013: GBP11.8 million). Net revenue margins, excluding performance fees, were 52 basis points (2013: 53 basis points).
Profit before tax and exceptional items increased 11 per cent to GBP235.1 million (H1 2013: GBP212.1 million). Exceptional items, principally the amortisation of the value of client relationships acquired with Cazenove Capital and STW, were GBP9.6 million (H1 2013: GBP0.3 million).
Investment performance remains competitive with 72 per cent of assets under management outperforming their benchmark or peer group over three years.
Net inflows in Institutional were GBP0.7 billion, with small net outflows in the second quarter principally due to outflows in commodities which reflected a challenging environment for this asset class. Assets under management in Institutional at the end of June were GBP148.0 billion (30 June 2013: GBP139.6 billion).
Net inflows in intermediary were GBP3.8 billion, predominantly into branded funds and concentrated in multi-asset and equities. Assets under management in intermediary at the end of June were GBP92.8 billion (30 June 2013: GBP79.2 billion).
Net revenues in wealth management increased 88 per cent to GBP100.5 million (H1 2013: GBP53.5 million), reflecting the inclusion of Cazenove Capital, and profit before tax and exceptional items more than doubled to GBP26.3 million (H1 2013: GBP10.6 million). Exceptional items of GBP8.9 million (H1 2013: GBPnil) included integration costs and the amortisation of client relationships acquired.
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