2nd Mar 2007 07:30
Schroders PLC02 March 2007 Press Release 2 March 2007 Schroders plcPreliminary Results to 31 December 2006 (unaudited) Profit before tax up 16 per cent. Underlying+ profit up 26 per cent. • Profit before tax £290.0 million (2005: £250.7 million, £230.3 million underlying+) • Asset Management profit before tax £219.0 million (2005: £193.9 million, £173.8 million underlying+) • Private Banking profit before tax £26.9 million (2005: £6.3 million, £6.0 million underlying+) • Private Equity profit before tax £34.6 million (2005: £40.3 million) • Funds under management £128.5 billion (31 December 2005: £122.5 billion) • Final dividend of 17.5 pence per share (final dividend 2005: 14.5 pence per share) Year ended Year ended 31 December 2006 31 December 2005 £mn £mn_______________________________________________________________________________________________ Asset Management profit 219.0 193.9Private Banking profit 26.9 6.3Private Equity profit 34.6 40.3Group profit 9.5 10.2_______________________________________________________________________________________________Profit before tax 290.0 250.7_______________________________________________________________________________________________Funds under management (£bn) 128.5 122.5_______________________________________________________________________________________________Total dividend (pence) 25.0 21.5_______________________________________________________________________________________________ + In this announcement the term 'underlying' denotes that the relevant 2005comparative has been adjusted to remove the impact of the one-off gain recordedin 2005 on the discontinuation of a project to outsource the UK custody andportfolio accounting services. The effect of this adjustment is to reduceprofit before tax in 2005 by £20.4 million (split between £20.1 million in theAsset Management segment and £0.3 million in Private Banking). Contacts: SchrodersMichael Dobson Chief Executive +44 (0) 20 7658 6962Jonathan Asquith Chief Financial Officer +44 (0) 20 7658 6565Henrietta Jowitt Head of Marketing and Communications +44 (0) 20 7658 6166 The Maitland ConsultancyWilliam Clutterbuck +44 (0) 20 7379 5151 Management Statement We expected 2006 to be a year of consolidation after four years of rapid growthin profit and with a programme of investment underway to position the firm forlonger term growth. It is very pleasing therefore to report another year ofsignificantly higher profit, a further increase in gross margins as we pursueour strategy of focusing on higher margin business, a major step forward inprivate banking and two acquisitions which extend our offering in alternativeinvestment areas. Group profit before tax at £290.0 million (2005: £250.7 million) was up 16 percent., with underlying profit up 26 per cent. excluding the one-off paymentreceived in 2005 for the termination of an outsourcing contract. Underlying Asset Management profit was up 26 per cent. to £219.0 million andunderlying Private Banking profit increased more than four times to £26.9million. Private Equity profit was £34.6 million (2005: £40.3 million). Fundsunder management ended the year up 5 per cent. at £128.5 billion (2005: £122.5billion). Asset Management Revenues and profit increased in Asset Management as we concentrate on highermargin products and sales channels. New business won in Institutional came in onaverage fees which were 31 per cent. higher than the fees charged on businesslost, and we returned to growth in the higher margin Retail channel with £3.8billion of net sales. Asset Management gross profit margins moved up to 55 basispoints (2005: 51 basis points). We had a very successful year in our Retail business with a resumption ofsignificant net inflows after the hiatus of 2005. In European equities, strongperformance across a range of products and a strengthened investment teamresulted in net inflows of £2.0 billion. In the UK, Retail had a record yearwith net inflows of £1.4 billion including sub-advisory business, and our marketshare of net fund flows from the independent intermediary sector was 5 percent., up sharply on 2005. We also had net inflows in Retail in continentalEurope and Asia Pacific and in our first year in the intermediary business inthe US. Funds under management in Retail ended the year at £42.5 billion (2005:£36.0 billion). Net outflows in Institutional were £8.0 billion and included UK balancedmandates where the industry continues to restructure. At the same time we areseeing good flows into "new balanced", our diversified growth offering forinstitutional clients which encompasses alternatives as well as traditionalasset classes and third party as well as Schroders products. The largestinstitutional outflows were in Japanese equities on the back of recent weakreturns after a long track record of outperformance. We have taken steps toaddress these performance issues but in the short term we expect to see furtheroutflows. By contrast, we had net institutional inflows into European equitiesof £1.1 billion. Funds under management in Institutional ended the year at £77.4billion (2005: £78.7 billion). Non-UK clients now account for 56 per cent. of our assets under management, upfrom 43 per cent. five years ago, and we see further excellent growthopportunities in our international business. We have a highly profitable andrapidly expanding business in Latin America with assets under management of £2.1billion. We have one of the fastest growing joint venture fund managementcompanies in China with our partner, Bank of Communications, which has seensignificant net inflows not included in our net new business flows because ofour minority (30 per cent.) position. In 2007, we plan to open offices in Dubaito serve our expanding base of Middle Eastern clients, and in India to accessthe rapidly growing funds market. NewFinance Capital (NFC), the funds of hedge funds business we acquired in May2006, has made good progress. We merged our existing funds of hedge fundsbusiness into NFC, assets under management now total £1.9 billion, investmentperformance has been strong and we are seeing a good pipeline of new businessopportunities. At the end of 2006 we announced the acquisition of Aareal Asset Management, acontinental European property business with EUR1.9 billion under management forinstitutional clients, which was successfully completed at the end of Februarythis year. At a time when institutional clients are seeking to broaden theirexposure in Europe, this opportunity represents a good strategic fit with ourexisting Property business which has £8.2 billion under management,predominantly in the UK. Private Banking We saw a major advance in the contribution from our Private Banking business in2006. With revenues up 33 per cent. to £98.5 million and costs only marginallyhigher than in 2005, underlying profit increased sharply to £26.9 million (2005:£6.0 million). Revenue growth came from good increases in investment managementrevenues in London and Switzerland and significantly higher banking fees inLondon. We are on target with the planned move of our back office operations toZurich, which will lead to important improvements in both client service andcost effectiveness from the second half of 2007. Private Banking now accounts for nearly 10 per cent. of total profit, asignificant increase on recent years as a result of a distinctive offering forprivate clients drawing on Schroders' wide ranging investment expertise andbanking skills, a clear focus on the UK and continental Europe from ourprincipal private banking offices in London, Guernsey, Geneva and Zurich, andtight control of costs. We expect the share of total profit generated by PrivateBanking to increase. Net new business in 2006 amounted to £0.4 billion and fundsunder management ended the year at £8.6 billion (2005: £7.8 billion). Group In 2006 we achieved total returns of £107.6 million (2005: £86.8 million) on ourinvestment capital which totalled £789.0 million at the year end, an averagereturn of 14 per cent. (2005: 11 per cent.). Within these returns, £75.7 millionwas reflected in realised profits while the unrealised balance of £31.9 millionwas added to shareholders' equity, to be taken to profit as it is realised infuture years (2005: £84.8 million realised and £2.0 million unrealised). Investment capital is deployed in a variety of forms. At year end, £145.6million was held in Schroder investment products, as part of our activeprogramme of seeding new funds and strategies before taking them to market, and£120.7 million was invested in a diversified, low volatility portfolio of hedgefunds, managed by NewFinance Capital. The majority of the balance was investedin private equity (£168.2 million) and liquid assets (£311.8 million). We continue to believe that maintaining a strong financial position is a keycompetitive advantage and enables us to take a long term view in building ourbusiness. Dividend In the light of the underlying growth in profit in 2006, the Board isrecommending an increased final dividend of 17.5 pence per share payable on 27April 2007 to shareholders on the register at 16 March 2007. This brings thetotal dividend for the year to 25.0 pence per share (2005: 21.5 pence pershare). The Board's policy is to increase the dividend progressively, in line withgrowth in profit. Outlook We have now achieved five years of significant annual increases in profit to alevel not seen since the sale of the investment banking business. Schroders is well placed for further growth, with a broadly diversified businessby asset class, by region and by client type. However, we still need to improvein certain areas and we will continue to focus on these and invest for thefuture, most particularly in adding to our talented group of people in what is ahighly competitive marketplace, and in continuing to upgrade our informationtechnology and operations infrastructure. Long term we see significant further opportunities to grow organically ininstitutional, retail and high net worth channels, supplemented by complementaryacquisitions which strengthen our business. Forward-looking statements This preliminary announcement contains certain forward-looking statements withrespect to the financial condition, results of operations and businesses ofSchroders plc. These statements and forecasts involve risk and uncertaintybecause they relate to events and depend upon circumstances that will occur inthe future. There are a number of factors that could cause actual results ordevelopments to differ materially from those expressed or implied by theseforward-looking statements and forecasts. The forward-looking statements andforecasts are based on the Directors' current view and information known to themat the date of this announcement. The Directors do not make any undertaking toupdate or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise. Nothing in this announcement should beconstrued as a profit forecast. Consolidated Income Statementyear ended 31 December 2006 2006 2005 £mn £mn____________________________________________________________________________________________________________________Revenue 967.2 808.0Cost of sales (169.0) (131.0) _________________________________Gross profit 798.2 677.0 Gain on discontinued outsourcing contract - 20.4Administrative expenses (542.3) (484.3) _________________________________Operating profit 255.9 213.1 ----------------------------Share of profit of associates 15.6 13.7 Share of loss of joint ventures (0.2) (0.2) ---------------------------- 15.4 13.5Interest receivable and similar income 20.1 25.3Interest payable and similar charges (1.4) (1.2) _________________________________Profit before tax 290.0 250.7 ----------------------------UK tax (23.5) (16.2) Foreign tax (44.6) (41.2) ----------------------------Tax (68.1) (57.4) _________________________________Profit after tax 221.9 193.3 _________________________________ Attributable to:Minority interests 0.6 2.0Equity holders of the parent 221.3 191.3 _________________________________ 221.9 193.3 _________________________________Memo - dividends (63.4) (59.5) Basic earnings per share 76.9p 65.7pDiluted earnings per share 75.7p 65.1p____________________________________________________________________________________________________________________ The final dividend payable for 2006 is 17.5 pence per share, amounting to adistribution of £49.7 million Consolidated Balance Sheetas at 31 December 2006 2006 2005 £mn £mn____________________________________________________________________________________________________________________Non-current assetsGoodwill 65.3 24.6Intangible assets 15.0 5.6Property, plant and equipment 12.7 9.4Associates 21.7 31.6Joint ventures 3.6 4.1Financial assets 198.6 123.9Deferred tax 44.4 54.9Trade and other receivables 420.8 303.0 ______________________________ 782.1 557.1Current assetsFinancial assets 1,664.0 1,795.9Current tax 16.5 17.7Trade and other receivables 617.0 544.9Cash and cash equivalents 439.2 402.4 ______________________________ 2,736.7 2,760.9 Non-current assets held for sale 60.1 23.4 Assets backing insurance unit-linked liabilitiesInvestments in authorised unit trusts 1,307.4 -Other financial assets 211.7 -Cash and cash equivalents 12.9 - ______________________________ 1,532.0 - ______________________________Total assets 5,110.9 3,341.4 ______________________________EquityCalled up share capital 293.9 298.5Share premium account 36.4 32.1Other reserves 15.1 -Capital reserves 156.3 185.5Own shares held (90.9) (45.7)Net exchange differences (53.7) 12.2Retained profits 1,086.3 860.2 ______________________________Equity attributable to equity holders of the parent 1,443.4 1,342.8 Minority interests 0.2 0.3 ______________________________Total equity 1,443.6 1,343.1 Non-current liabilitiesFinancial liabilities - 12.0Deferred tax 2.4 2.8Provisions 10.8 10.1Trade and other payables 325.2 185.3 ______________________________ 338.4 210.2Current liabilitiesFinancial liabilities 0.3 4.2Provisions 13.9 14.7Current tax 31.9 32.9Trade and other payables 1,750.8 1,736.3 ______________________________ 1,796.9 1,788.1 Insurance unit-linked liabilitiesLiability linked to life company investments 1,532.0 - ______________________________Total equity and liabilities 5,110.9 3,341.4_________________________________________________________________________________________________________________ Consolidated Statement of Recognised Income and Expenseyear ended 31 December 2006 2006 2005 £mn £mn_________________________________________________________________________________________________________________Exchange differences on translation of foreign operations (65.9) 38.6Net gains/(losses) on hedges recognised directly in equity 32.2 (26.9)Actuarial gains on defined benefit pension schemes 5.5 5.1Net gains on available-for-sale investments 65.2 44.3Tax on items taken directly to equity 6.6 6.8 ______________________________Net income and expense recognised directly in equity 43.6 67.9 Profit for the year 221.9 193.3 ______________________________Total recognised income and expense for the year 265.5 261.2 ______________________________Attributable to:Minority interests 0.6 2.0Equity holders of the parent 264.9 259.2 ______________________________ 265.5 261.2_________________________________________________________________________________________________________________ Consolidated Cash Flow Statementyear ended 31 December 2006 2006 2005 £mn £mn_________________________________________________________________________________________________________________Net cash from operating activities 209.2 92.2 Investing activitiesProceeds from disposal of business - 0.2Acquisition of subsidiaries (19.8) (0.8)Cash acquired with acquisitions 6.8 0.8Purchase of joint ventures - (4.2)Purchase of intangible assets (4.6) (1.8)Purchase of property, plant and equipment (7.1) (5.7)Purchase of non-current financial assets (62.9) (62.4)Purchase of non-current assets held for sale (90.1) (23.4)Disposal of non-current assets held for sale 50.8 -Proceeds from sale of intangible assets - 0.1Proceeds from sale of non-current financial assets 64.1 73.9Proceeds from sale of property, plant and equipment 0.4 0.5Proceeds from repayment of loans by associates - 30.3Net proceeds from sale/(purchase) of current financial assets 58.6 (68.9)Interest received 9.0 15.7Dividends/capital distributions received from associates and joint 23.6 9.0ventures ______________________________Net cash from/(used in) investing activities 28.8 (36.7) Financing activitiesProceeds from issue of share capital 27.8 21.8Acquisition of own shares (90.8) (23.7)Disposal of own shares 37.3 -Redemption of ordinary share capital (84.3) (15.3)Distributions made to minority interests - (11.9)Dividends paid (63.4) (59.5) ______________________________Net cash used in financing (173.4) (88.6) ______________________________Net increase/(decrease) in cash and cash equivalents 64.6 (33.1) ______________________________Opening cash and cash equivalents 402.4 432.1Net increase/(decrease) in cash and cash equivalents 64.6 (33.1)Effect of exchange rate changes (14.9) 3.4 ______________________________Closing cash and cash equivalents 452.1 402.4 ______________________________ Closing cash and cash equivalents consists of:Cash and cash equivalents backing insurance unit-linked liabilities 12.9 -Other cash and cash equivalents held by the Group 439.2 402.4 ______________________________ 452.1 402.4_________________________________________________________________________________________________________________ Notes to the Accounts Basis of Preparation The preliminary results for the year ended 31 December 2006 are unaudited. Thefinancial information included in this statement does not constitute the Group'sstatutory accounts within the meaning of Section 240 of the Companies Act 1985.Statutory accounts for the year ended 31 December 2006 will be delivered to theRegistrar of Companies in due course. The annual report will be posted to shareholders on 16 March 2007 and furthercopies will be available from the Company Secretary at the Company's registeredoffice. The Company's Annual General Meeting will be held on 24 April 2007 at11.30 a.m. at 31 Gresham Street, London, EC2V 7QA. Presentation of the Preliminary Results Financial information for the year ended 31 December 2006 is presented inaccordance with IAS 1 Presentation of Financial Statements. IAS 1 allows anentity to present some of its assets and liabilities using a current/non-currentclassification and others in order of liquidity when this provides informationthat is reliable and more relevant. The Group has adopted this mixed basis ofpresentation within its consolidated balance sheet as the non-current/currentallocation is the more relevant presentation for the Group generally, whilst theassets and liabilities of the Group's life company business are more relevantlypresented based on liquidity. Accounting Policies In preparing the financial information included in this statement the Group hasapplied policies which are in accordance with International Financial ReportingStandards as adopted by the European Union at 31 December 2006, and inaccordance with the IFRS accounting policies that were applied as at 31 December2005, except for the additional policy set out below in respect of the lifecompany business established during 2006: Insurance unit-linked liabilities and assets backing insurance unit-linkedliabilitiesInvestments in authorised unit trusts and other financial assets held within thelife company business are recognised and measured under IAS 39 which applies toinvestment contracts that do not meet the insurance contract definition underIFRS 4. Accordingly the life fund assets are carried at fair value, with gainsand losses recorded in the income statement in the year in which they arise. Theliabilities are also recorded at fair value. Segmental Reporting Primary reporting format - business segmentsThe Group has four continuing classes of business: Asset Management, PrivateBanking, Private Equity and Group (formerly referred to as "Group Net Income/(Costs)"). Asset Management principally comprises investment managementincluding advisory services, property and alternative assets; Private Bankingprincipally comprises investment management and banking services provided tohigh net worth individuals and certain smaller institutions; Private Equityprincipally comprises the Group's investments in private equity, venture andbuyout funds and related vehicles; Group consists of income on the Group'sliquid and seed capital less Group costs and provisions, and the results of theleasing business and the residual assets. The allocation of costs to individual business segments is undertaken in orderto provide management information on the cost of providing services and toprovide managers with a tool to manage and control expenditure. Costs areallocated on a basis that aligns the charge with the resources employed by theGroup in a particular area of its business. Typical dynamic allocation bases aresquare footage occupied and number of staff employed by particular businesssegments. Non-current assets held for sale are included within the Group segment. Year ended 31 December 2006 Asset Private Private Inter-segment Management* Banking Equity Group elimination Total £mn £mn £mn £mn £mn £mn_____________________________________________________________________________________________________________________ ----------------------------------------------------------------------------External revenue 811.1 80.1 22.2 31.0 - 944.4External net interest - 22.8 - - - 22.8Inter-segment interest payable - (4.4) - - 4.4 - ----------------------------------------------------------------------------Total revenue 811.1 98.5 22.2 31.0 4.4 967.2 Cost of sales (166.2) (2.8) - - - (169.0) __________________________________________________________________________________Gross profit 644.9 95.7 22.2 31.0 4.4 798.2 Administrative expenses (436.6) (68.8) (3.2) (33.7) - (542.3) __________________________________________________________________________________Operating profit 208.3 26.9 19.0 (2.7) 4.4 255.9 ---------------------------------------------------------------------------- Share of profit of associates - - 15.6 - - 15.6Share of loss of joint ventures (0.2) - - - - (0.2) ---------------------------------------------------------------------------- (0.2) - 15.6 - - 15.4 ----------------------------------------------------------------------------External interest receivable and similar income 6.3 - - 13.8 - 20.1 Inter-segment interest receivable 5.2 - - (0.8) (4.4) - ----------------------------------------------------------------------------Interest receivable and similar income 11.5 - - 13.0 (4.4) 20.1Interest payable and similar charges (0.6) - - (0.8) - (1.4) __________________________________________________________________________________Profit before tax 219.0 26.9 34.6 9.5 - 290.0 __________________________________________________________________________________ Segment assets 2,427.3** 1,942.8 170.3*** 856.1 (285.6) 5,110.9Segment liabilities (2,013.3) (1,749.5) (2.2) (187.9) 285.6 (3,667.3) __________________________________________________________________________________ 414.0 193.3 168.1 668.2 - 1,443.6_____________________________________________________________________________________________________________________ * Includes the Group's life company business** Includes £3.6 million investment in joint ventures, £0.1 million investment in associates*** Includes £21.6 million investment in associates Inter-segment amounts represent interest payable and receivable on cash balancesheld by Private Banking on behalf of Group companies. Segmental Reporting (continued)Year ended 31 December 2005 Asset Private Private Inter-segment Management Banking Equity Group elimination Total £mn £mn £mn £mn £mn £mn _____________________________________________________________________________________________________________________ ----------------------------------------------------------------------------External revenue 667.8 58.5 28.7 31.0 - 786.0External net interest - 22.0 - - - 22.0Inter-segment interest payable - (6.4) - - 6.4 - ----------------------------------------------------------------------------Total revenue 667.8 74.1 28.7 31.0 6.4 808.0 Cost of sales (128.8) (2.0) - (0.2) - (131.0) __________________________________________________________________________________Gross profit 539.0 72.1 28.7 30.8 6.4 677.0 Gain on discontinued outsourcing contract 20.1 0.3 - - - 20.4Administrative expenses (374.0) (66.1) (3.0) (41.2) - (484.3) __________________________________________________________________________________Operating profit 185.1 6.3 25.7 (10.4) 6.4 213.1 ----------------------------------------------------------------------------Share of profit of associates - - 13.7 - - 13.7Share of loss of joint ventures (0.2) - - - - (0.2) ---------------------------------------------------------------------------- (0.2) - 13.7 - - 13.5 ----------------------------------------------------------------------------External interest receivable and similar income 4.9 - 0.9 19.5 - 25.3Inter-segment interest receivable 4.3 - - 2.1 (6.4) -Interest receivable and similar income 9.2 - 0.9 21.6 (6.4) 25.3 ----------------------------------------------------------------------------Interest payable and similar charges (0.2) - - (1.0) - (1.2) __________________________________________________________________________________Profit before tax 193.9 6.3 40.3 10.2 - 250.7 __________________________________________________________________________________ Segment assets 647.8* 1,971.1 161.5** 777.5 (216.5) 3,341.4Segment liabilities (369.2) (1,800.0) (0.4) (45.2) 216.5 (1,998.3) __________________________________________________________________________________ 278.6 171.1 161.1 732.3 - 1,343.1_____________________________________________________________________________________________________________________ * Includes £4.1 million investment in joint ventures** Includes £31.6 million investment in associates Inter-segment amounts represent interest payable and receivable on cash balancesheld by Private Banking on behalf of Group companies. Tax Expense 2006 2005 £mn £mn_________________________________________________________________________________________________________________Profit before tax 290.0 250.7 Profit before tax multiplied by corporation tax at the UK standard rate of 30% (2005: 30%) 87.0 75.2 Effects of:Impact of profits/losses arising in jurisdictions with higher tax rates 7.0 3.1Impact of profits/losses arising in jurisdictions with lower tax rates (24.6) (22.9)Non taxable income net of disallowable expenses (4.7) (5.5)Movement in unrecognised deferred tax - current year 2.9 2.9UK tax on profits of overseas entities after double taxation relief 4.0 2.7Prior year adjustments:UK prior year - current (6.3) (0.1)Foreign tax prior year - current (0.8) 0.7Deferred tax prior year 3.6 1.3 ______________________________Total tax charge for the year 68.1 57.4_________________________________________________________________________________________________________________ Reconciliation of Net Cash from Operating Activities 2006 2005 £mn £mn_________________________________________________________________________________________________________________Operating profit 255.9 213.1 Adjustments for:Depreciation and amortisation of software 7.5 10.9Amortisation of fund management contracts 1.0 -Impairment of available-for-sale assets recycled through the income 1.4 1.3statementOther amounts recycled through the income statement in respect of (24.7) (32.3)investmentsIncrease in trade and other receivables (241.2) (154.2)Increase in trade and other payables and provisions 195.1 402.1Increase in insurance unit-linked liabilities 1,532.0 -Net decrease in financial liabilities (15.9) (18.0)Profit on disposal of business - (0.2)Charge for provisions 5.8 9.4Net gains on financial assets held at fair value through profit or loss (30.3) (24.2)Share-based payments expensed 27.5 23.3Other non-cash movements 42.7 (26.1)Special payment made to UK pension scheme - (30.3)UK corporation tax recovered/(paid) 5.1 (16.1)Overseas tax paid (36.2) (34.7)Interest received 10.6 11.8Interest paid (1.4) (1.2)Net purchase of assets backing insurance unit-linked liabilities (1,519.1) -Net purchase of current financial assets (6.6) (242.4) ______________________________Net cash from operating activities 209.2 92.2_________________________________________________________________________________________________________________ Five Year Financial Summary Prepared under IFRS Prepared under UK GAAP* 2006 2005 2004 2004 2003 2002 £mn £mn £mn £mn £mn £mn_________________________________________________________________________________ __________________________Profit before tax 290.0 250.7 211.6 191.0 65.0 18.9Tax (68.1) (57.4) (40.3) (41.4) (16.4) 7.7 ___________________________ __________________________Profit after tax before minority interests 221.9 193.3 171.3 149.6 48.6 26.6Minority interests (0.6) (2.0) (15.6) (15.6) - (0.5) ___________________________ __________________________Profit for the year 221.3 191.3 155.7 134.0 48.6 26.1 ___________________________ __________________________Earnings per share:Basic earnings per share (pence) 76.9 65.7 53.5 46.0 16.5 8.8Diluted earnings per share (pence) 75.7 65.1 53.1 45.7 16.4 8.8 Dividends:Cost (£mn) 63.4 59.5 56.4 57.8 53.7 53.3Pence per share 22.0 20.5 19.5 20.0 18.5 18.5 Total equity (£mn) 1,443.6 1,343.1 1,130.6 1,114.1 1,029.2 1,051.9 Net assets per share (pence) 491 450 381 375 350 355________________________________________________________________________________________________________________ * The main adjustments necessary that would make this information comply withInternational Financial Reporting Standards are those concerned with themeasurement of share-based payments, dividends, leases, employee benefits,intangible assets (including goodwill), revenue, and non-current assetsclassified as being held for sale. Funds under Management - 2006 Flows Total Institutional Retail Private Banking £bn £bn £bn £bn_________________________________________________________________________________________________________________31 December 2005 122.5 78.7 36.0 7.8Purchase of NFC 1.4 1.4 0.0 0.0 ------------------------------------------------------------Gross sales 38.0 9.2 26.1 2.7Gross redemptions (41.8) (17.2) (22.3) (2.3) ------------------------------------------------------------Net assets (losses)/gains (3.8) (8.0) 3.8 0.4Market movement 8.4 5.3 2.7 0.4 ____________________________________________________________31 December 2006 128.5 77.4 42.5 8.6_________________________________________________________________________________________________________________ Income and Cost Metrics for the Group 2006 2005_________________________________________________________________________________________________________________Group cost: income ratio 65% 66%Group cost: gross profits 68% 72%Compensation costs: operating revenues 47% 51%Return on average capital (pre-tax) 21% 20%Return on average capital (post-tax) 16% 16%Asset Management cost: gross profits 68% 69%Asset Management gross profit on average funds under management 55bps 51bpsAsset Management costs on average funds under management 37bps 35bpsAsset Management costs on closing funds under management 36bps 33bps_________________________________________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Schroders