6th Mar 2014 09:08
LONDON (Alliance News) - Schroders PLC Thursday reported a 24% increase in pretax profit after a year in which management and performance fees swelled on the back of strong net inflows and reinforced by the acquisition of Cazenove Capital.
Schroders will pay a 58.0 pence full-year dividend, up from 43.0 pence in 2012, with Chief Executive Michael Dobson stating that the 35% increase was the culmination of a strong financial position and confidence in opportunities for continued growth in the long-term.
The FTSE 100 asset manager and private bank reported a GBP447.5 million pretax profit for 2013, up from GBP360.0 million in 2012, after assets under management grew to GBP262.9 billion from GBP212.0 billion, driving revenue to GBP1.81billion from GBP1.43 billion.
Operating expenses rose to GBP977.8 million from GBP791.2 million, as salaries, wages and other remuneration rose to GBP573.6 million from GBP472.4 million.
Excluding exceptional items, such as acquisition and integration costs, Schroders reported a GBP507.8 million pretax profit.
The exceptional items also include a GBP15.0 million provision for possible liability arising from the US Department of Justice's review of accounts held in Swiss banks that may not have been compliant with US tax. Schroders said the provision relates principally to closed accounts.
Schroders reported a fall in overall net inflows to GBP7.9 billion from GBP9.4 billion in 2012, but the asset manager reported a GBP2.4 billion net inflow in the fourth-quarter. Schroders made GBP3.8 billion in investment returns in the fourth-quarter, part of GBP15.8 billion over the year.
Dobson said the strong result was a result of Schroders' "highly diversified business".
In asset management, net revenue increased 23% to GBP1.25 billion from GBP1.01 billion in 2012 after a sharp rise in performance fees as a result of strong investment performance, while there was a rebound in wealth management after a challenging time in 2012, it said.
The recovery was boosted by Schroders' acquisition of Cazenove Capital for GBP424 million last July, with the response from clients "very encouraging".
Schroders said 2014 is likely to be more challenging for investors but said it is "well placed for further growth in the long term".
Schroders shares were Thursday quoted at 2,739.00 pence, up 149.00 pence, or 5.8%.
By Samuel Agini; [email protected]; @samuelagini
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