Thursday 07 March 2019 8:35 am | Updated: Monday 03 June 2019 1:06 am

Schroders profits fall 15 per cent on weak investor sentiment

Schroders saw profit drop 15 per cent last year as the asset management giant was hit by weaker investor sentiment due to political and economic uncertainty.

The figures

Profit before tax fell 15 per cent to £649.9m from £760.2m in the 12 months to the end of December last year.

Assets under management and administration dropped six per cent from £446bn to £421.4bn and the firm saw net outflows of £9.5bn compared to inflows of £9.6bn the previous year.

The company increased its dividend per share by 1p from 113p to 114p.

Why it’s interesting

Outflows sparked by worsening investor sentiment were mainly from lower margin businesses, the company said, while it continued to see demand for higher margin strategies.

Profit was also hit by structural reorganisation within the group, leading to exceptional costs of £56m during the year.

Alongside the full-year results the firm announced that Leonie Schroder will join the board as a non-independent non-executive director following the death of her father Bruno Schroder in February.

She will be joined by Deborah Waterhouse, the chief executive of Vivv Healthcare.

What the company said

Chief executive Peter Harrison said: "We have been pleased with the underlying strength of the business and the resilience of our diversified business model in 2018.

“We were delighted to achieve over £85bn of notified net new inflows at the year end, despite seeing net outflows of £9.5bn.

“We continued to invest for growth and saw good progress in a number of strategically important areas. There was strong demand from Wealth Management clients and we announced that we would be entering into a partnership with Lloyds Banking Group to expand our proposition in the UK savings market, under the brand of Schroders Personal Wealth.

“Through organic growth and selective acquisitions, we further increased our footprint and capabilities in North America and Private Assets and Alternatives, two key areas of strategic growth.

“We remain confident that our global presence and diversified business model mean we are well positioned to generate growth for both our clients and shareholders over the long term."