Schroders says it has again delivered strong results in 2017, with the company reporting a 24 per cent increase in pre-exceptional profit to GBP800.3 million (2016: GBP644.7 million) and a 23 per cent increase in profit before tax to GBP760.2 million (2016: GBP618.1 million).
Net operating revenue increased by 17 per cent to GBP2,010.2 million (2016: GBP1,712.8 million) and net income before exceptional items rose by 15 per cent to GBP2,068.9 million (2016: GBP1,793.1 million), driven by higher assets under management and administration (AUMA) and performance fees.
Schroders says this was achieved whilst maintaining cost discipline, with the ratio of total costs to net income reducing by three percentage points to 61 per cent (2016: 64 per cent).
At 31 December 2017 AUMA was GBP447.0 billion, a 13 per cent increase from the prior year end (31 December 2016: GBP395.3 billion). This was driven by strong investment performance, acquisitions aligned with the company’s strategic priorities and net new business from clients of GBP9.6 billion, which generates around GBP63 million of annualised net new revenue, around GBP24 million of which is in these results.
Weakness in sterling in the first half of the year, compared to 2016, contributed positively to profit before tax and exceptional items by around GBP27 million. However, as sterling strengthened in the second half, the impact at 31 December 2017 was to reduce assets under management (AUM) by around GBP12 billion.
Peter Harrison, Group Chief Executive, says: “Schroders has again delivered strong results in 2017, with our diversified business model and client-centric approach generating growth across the Group. Underlying organic growth and selective acquisitions combined with rigorous cost discipline led to a 24 per cent increase in pre-exceptional profit. Assets under management and administration rose to a new high of GBP447.0 billion.”
“Focusing on the longer term, we have continued to see good progress in a number of key strategic areas, with the expansion of our investment capabilities in private assets, an improvement in Wealth Management and strong underlying momentum in North America.
“There are headwinds facing the industry but we continue to believe that there remain opportunities for growth. Our diversified business model, ongoing focus on costs, strong financial position and willingness to invest mean that we continue to be well placed.”
