Schroder Real Estate Investment Trust (SREI) H2 2024 earnings summary

Executive summary

• Achieved strong investment performance, with 70% outperformance over 1 year, 58% over 3 years, and 76% over 5 years compared to European peers.

• Group AUM increased 4% to £778.7bn, with growth in most business areas except Solutions.

• Profit before tax rose 14% year-over-year to £558.1m, while operating profit declined 3% to £640.5m.

• Basic EPS increased 7% to 26.4p; total dividend maintained at 21.5p per share.

Financial highlights

• Underlying revenues up 2% to £2,294.3m; net operating income stable at £2,426.8m.

• Operating expenses rose 2% to £1,786.3m, with cost growth contained and savings reinvested in new capabilities.

• Net new business (NNB) was negative at £(4.7)bn, impacted by insurance outflows.

• Restructuring costs of £86.2m recognized.

Outlook and guidance

• Targeting £150m of cost efficiencies by FY27, aiming for an adjusted cost to income ratio below 70%.

• Public Markets to stabilize revenues; Schroders Capital to generate £20bn cumulative NNB; Wealth Management to achieve 5-7% NNB growth per annum.

• Continued focus on simplification, scaling, and operational efficiency.