Schroders (SDR) H1 2025 earnings summary

Executive summary

• Adjusted operating profit rose 7% year-on-year to £316m, driven by revenue growth, cost control, and transformation progress.

• Gross inflows increased 8% to £68.2bn, with net new business of £4.5bn excluding JVs and associates.

• Transformation programme delivered £21m in net cost savings in H1, with FY 2025 savings expected at £50m and annualised savings of £150m by 2027.

• Profit before tax fell 29% to £196.9m, impacted by £44.9m in transformation costs and £56m in portfolio restructuring charges.

• Strategic simplification included business closures, divestitures, and key leadership hires to support growth.

Financial highlights

• Net operating revenue up 2% year-on-year to £1,170.3m; adjusted net operating income up 3% to £1,213.9m.

• Adjusted operating expenses rose 1% to £897.9m, with cost:income ratio improving to 74% from 75% last year.

• Adjusted basic operating EPS up 8% to 14.8p; interim dividend maintained at 6.5p per share.

• Average AUM up 3% year-on-year to £662bn, despite a £14bn FX headwind.

• Statutory profit before tax fell 29% to £196.9m.

Outlook and guidance

• Targeting £150m annualised net cost savings by 2027 and cost:income ratio below 70% by 2027.

• In-year net cost savings for 2025 now expected to be £50m, up from £40m previously guided.

• Focus on execution, client outcomes, and continued investment in talent and growth areas.

• Committed to stabilising Public Markets revenues and generating £20bn cumulative NNB in Schroders Capital by 2027.

• Expectation of stable cost:income ratio at 74% for the full year, assuming stable markets.