Schroders (SDR) H1 2024 earnings summary

Executive summary

• Assets under management reached a record £773.7bn, up 7% year-on-year, driven by positive markets, strong investment performance, and net new business of £3.9bn including JVs and associates.

• Wealth Management delivered 7% advised organic growth, net inflows of £3.7bn, and now represents 27% of Group operating profit.

• Private Markets fundraising increased to £5.2bn, with net new business of £3bn and all pillars contributing positively.

• Operating profit was £315m, down 8% year-on-year, impacted by lower performance fees and margin pressure; interim dividend maintained at 6.5p per share.

• Operating expenses decreased by 1% year-on-year due to efficiency initiatives and cost discipline.

Financial highlights

• Net operating revenue was £1,137.0m, down from £1,169.8m in H1 2023, with net operating income at £1,175.2m.

• Profit before tax was £276.3m, flat year-on-year.

• Basic operating EPS was 14.7p, down from 16.8p year-on-year.

• Interim dividend maintained at 6.5p per share.

• Operating compensation costs were £545.1m, with a stable compensation ratio of 46%.

Outlook and guidance

• Strategic focus remains on growth in Wealth Management, Private Markets, and Solutions, with guidance for net asset growth in Wealth Management reiterated at 5%-7% per annum.

• Margin outlook softer due to business mix and ongoing pricing pressures in public markets.

• Full-year guidance for non-compensation costs capped at £675m.

• Effective tax rate expected to remain around 22.8% for the full year.

• Performance fees and carry likely to be below the £75m budgeted for the year.