Schroders share price slides as group posts FY profit drop

Shares in Schroders (LON:SDR) have fallen into the red in today’s session, as the blue-chip asset manager posted a drop in profits for last year. The company, however, posted higher net income and unveiled higher dividend.

As of 14:47 GMT, Schroders’ share price had given up 5.73 percent to 2,600.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.70 percent lower at 7,145.44 points. The group’s shares have lost more than 22 percent of their value over the past year, as compared with a flat Footsie.

Schroders updates on performance

Schroders announced in a statement today that its net income before exceptional items had climbed three percent to £2.12 billion last year. The group’s profit before tax and exceptional items, however, dipped five percent to £761.2 million, while profit before tax came in 15 percent lower at  £649.9 million. Assets under management and administration fell six percent to  £421.4 billion, while net outflows slowed to £9.5 billion from £9.6 billion. Schroders announced a total dividend of 114.0p per share, compared with 113.0p for 2017.

“We have been pleased with the underlying strength of the business and the resilience of our diversified business model in 2018,” the group’s chief executive Peter Harrison commented in the statement.

Analysts weigh in on group’s results

“These results look bang in line with market expectations, but then, if anyone should know about managing market expectations, it ought to be a major asset manager like Schroders,” Steve Clayton, manager of the HL Select UK Growth Shares fund, which has a position in Schroders, commented, as quoted by Proactive Investors, adding that with “fees typically linked directly to the value of assets managed, it’s pretty hard for a fund management business to do anything other than position themselves for the long run and manage the impact of market movements as best they can along the way”.

As of 15:07 GMT, Thursday, 07 March, Schroders plc share price is 2,600.00p.