Schroders (SDR) H2 2024 earnings summary

Executive summary

• Leadership emphasized a renewed focus on client outcomes, simplification, and profitable growth, acknowledging past underperformance in shareholder returns and operational complexity.

• Achieved 4% growth in AUM to £778.7bn, with underlying revenues up 2% year-over-year.

• Profit before tax rose 14% to £558.1m, while operating profit declined 3% to £640.5m compared to 2023.

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

• A three-year transformation plan targets cost savings, operational efficiency, and focused capital allocation, with clear financial and operational targets.

Financial highlights

• Operating profit for 2024 was £641 million, down 3% year-over-year, despite a 4% increase in AUM to £778.7 billion.

• Net operating income stable at £2,426.8m, reflecting business resilience despite market and FX headwinds.

• Profit before tax rose 14% to £558 million, aided by the absence of restructuring costs.

• Gross inflows reached £129.7 billion, the highest since 2020, with notable strength in fixed income and global equities.

• Board proposed a final dividend of £0.15 per share, totaling £0.215 for the year.

Outlook and guidance

• Targeting £150 million in net cost savings by 2027, with £40 million expected in 2025.

• Aims to reduce cost-to-income ratio from 75% to below 70% by 2027.

• Public Markets revenue expected to stabilize by FY 2027, with focus on nine core capabilities.

• Schroders Capital targets £20 billion cumulative net new business over three years.

• Wealth Management maintains 5%-7% annual AUM growth target.