3rd Quarter Results

RNS Number : 1931O

Schroders PLC

03 November 2016

 

Schroders plc Interim management statement 3 November 2016 Schroders plc today issues its interim management statement covering the nine months to 30 September 2016. •    Profit before tax and exceptional items £455.3 million (2015: £453.2 million) •    Profit before tax £436.2 million (2015: £438.9 million) •    Assets under management £375.0 billion (30 September 2015: £294.8 billion) Peter Harrison, Group Chief Executive, commented: "We continued to deliver solid results in the first nine months of the year, with profit before tax of £436.2 million.  Our diversified business model generated £2.7 billion of net new business and assets under management increased to £375.0 billion. We have made progress against our strategic objectives, particularly in North America." Asset Management Asset Management net operating revenue for the first nine months was £1,071.3 million (2015: £1,032.0 million), including performance fees of £13.3 million (2015: £12.7 million).  Profit before tax and exceptional items was £399.1 million (2015: £400.4 million) and profit before tax was £386.8 million (2015: £391.3 million). Net inflows for the nine months were £3.2 billion, comprising net inflows of £5.4 billion in Institutional and net outflows of £2.2 billion in Intermediary.  Assets under management at 30 September were £339.4 billion (30 September 2015: £263.9 billion). Wealth Management Wealth Management net operating revenue for the first nine months was £162.6 million (2015: £157.6 million). Profit before tax and exceptional items was £49.5 million (2015: £46.5 million) and profit before tax was £42.7 million (2015: £47.7 million).  There were net outflows of £0.5 billion over the nine months and assets under management at 30 September were £35.6 billion (30 September 2015: £30.9 billion). Group The Group segment comprises central costs and returns on investment capital.  Profit before tax in the first nine months was £6.7 million (2015: loss before tax of £0.1 million). Shareholders' equity at 30 September 2016 was £2.9 billion (30 September 2015: £2.6 billion). Peter Harrison, Group Chief Executive, and Richard Keers, Chief Financial Officer, will host a conference call for the investment community, to discuss the third quarter interim management statement at 9am GMT on Thursday, 3 November 2016. The conference call telephone number is 0800 694 1515 (International: [phone]), conference ID 4511464. For individuals unable to participate in the conference call, a telephone replay will be available from 2pm GMT on Thursday, 3 November for one month. Please telephone [phone] (International: [phone]), conference ID 4511464. Contacts For further information please contact: Investors Alex James Investor Relations [phone] [e-mail] Press Beth Saint Head of Communications [phone] [e-mail] Anita Scott Brunswick [phone] [e-mail] Appendix Assets under management Nine months to 30 September 2016 Institutional £bn Intermediary £bn Asset Management £bn Wealth Management £bn Total £bn 1 January 2016 181.0 100.9 281.9 31.6 313.5 Net flows 5.4 (2.2) 3.2 (0.5) 2.7 Acquisitions1 1.9 1.4 3.3 - 3.3 Investment returns2 34.5 17.4 51.9 3.6 55.5 Transfers3 (0.9) - (0.9) 0.9 - 30 September 2016 221.9 117.5 339.4 35.6 375.0 Three months to 30 September 2016 Institutional £bn Intermediary £bn Asset Management £bn Wealth Management £bn Total £bn 1 July 2016 203.6 106.4 310.0 33.8 343.8 Net flows 1.0 1.1 2.1 (0.1) 2.0 Acquisitions1 1.9 1.4 3.3 - 3.3 Investment returns4 15.4 8.6 24.0 1.9 25.9 30 September 2016 221.9 117.5 339.4 35.6 375.0 1Relates to the acquisition of a securitised credit business in North America. 2The weakening of Sterling since 1 January 2016 had the effect of increasing total assets under management by £38.6bn. 3Relates to the transfer of charities assets from Asset Management to Wealth Management. 4The weakening of Sterling since 1 July 2016 had the effect of increasing total assets under management by £10.1bn. Financial information Nine months to 30 September 2016 Asset Management £m Wealth Management £m Group £m Total £m Net operating revenue 1,071.3 162.6 - 1,233.9 Net gains on financial instruments and other income 35.3 1.6 25.1 62.0 Share of profit of associates and joint ventures 12.0 - 4.3 16.3 Net income1 1,118.6 164.2 29.4 1,312.2 Operating expenses (719.5) (114.7) (22.7) (856.9) Profit before tax and exceptional items 399.1 49.5 6.7 455.3 Exceptional items within operating expenses: Amortisation of acquired intangible assets (8.3) (6.0) - (14.3) Deferred compensation arising from acquisitions - - 1.0 1.0 Other expenses (1.8) (0.8) (1.0) (3.6) (10.1) (6.8) - (16.9) Exceptional items within net income: Amortisation of acquired intangible assets within share of profit of associates and joint ventures (1.5) - - (1.5) Net losses on financial instruments and other income (0.7) - - (0.7) Total exceptional items (12.3) (6.8) - (19.1) Profit before tax 386.8 42.7 6.7 436.2 Three months to 30 September 2016 Asset Management £m Wealth Management £m Group £m Total £m Net operating revenue 383.5 55.5 - 439.0 Net gains on financial instruments and other income 13.4 1.1 10.3 24.8 Share of profit of associates and joint ventures 3.5 - 0.7 4.2 Net income1 400.4 56.6 11.0 468.0 Operating expenses (258.9) (39.5) (8.0) (306.4) Profit before tax and exceptional items 141.5 17.1 3.0 161.6 Exceptional items within operating expenses: Amortisation of acquired intangible assets (2.8) (2.0) - (4.8) Deferred compensation arising from acquisitions - - (0.1) (0.1) Other expenses (0.2) (0.8) (1.0) (2.0) (3.0) (2.8) (1.1) (6.9) Exceptional items within net income: Amortisation of acquired intangible assets within share of profit of associates and joint ventures (0.5) - - (0.5) Net losses on financial instruments and other income (0.3) - - (0.3) Total exceptional items (3.8) (2.8) (1.1) (7.7) Profit before tax 137.7 14.3 1.9 153.9 1Previously referred to as 'Net revenue'. Financial information Nine months to 30 September 2015 Asset Management £m Wealth Management £m Group £m Total £m Net operating revenue 1,032.0 157.6 - 1,189.6 Net gains/(losses) on financial instruments and other income 2.3 (0.3) 19.1 21.1 Share of profit of associates and joint ventures 10.7 - 7.9 18.6 Net income1 1,045.0 157.3 27.0 1,229.3 Operating expenses (644.6) (110.8) (20.7) (776.1) Profit before tax and exceptional items 400.4 46.5 6.3 453.2 Exceptional items within operating expenses: Amortisation of acquired intangible assets (7.3) (6.0) - (13.3) Deferred compensation arising from acquisitions - - (6.4) (6.4) Provisions and related costs - 7.2 - 7.2 (7.3) 1.2 (6.4) (12.5) Exceptional items within net income: Amortisation of acquired intangible assets within share of profit of associates and joint ventures (1.8) - - (1.8) Total exceptional items (9.1) 1.2 (6.4) (14.3) Profit/(loss) before tax 391.3 47.7 (0.1) 438.9 Three months to 30 September 20152 Asset Management £m Wealth Management £m Group £m Total £m Net operating revenue 339.1 51.9 - 391.0 Net (losses)/gains on financial instruments and other income (0.2) (0.1) 7.2 6.9 Share of profit of associates and joint ventures 4.0 - 1.0 5.0 Net income1 342.9 51.8 8.2 402.9 Operating expenses (213.5) (35.3) (6.6) (255.4) Profit before tax and exceptional items 129.4 16.5 1.6 147.5 Exceptional items within operating expenses: Amortisation of acquired intangible assets (2.4) (2.0) - (4.4) Deferred compensation arising from acquisitions - - (1.0) (1.0) Provisions and related costs - 7.2 - 7.2 (2.4) 5.2 (1.0) 1.8 Exceptional items within net income: Amortisation of acquired intangible assets within share of profit of associates and joint ventures (0.7) - - (0.7) Total exceptional items (3.1) 5.2 (1.0) 1.1 Profit before tax 126.3 21.7 0.6 148.6 1Previously referred to as 'Net revenue'. 2Reformatted to reflect the new definition of net income and the introduction of net operating revenue. Forward-looking statements This interim management statement may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are based on current expectations and assumptions but relate to events and depend upon circumstances in the future and you should not place reliance on them. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'sees', 'believes', 'expects', 'aims', 'confident', 'will have', 'will be', 'will ensure', 'estimates' or 'anticipates' or the negative of these terms or other similar terms are intended to identify such forward-looking statements. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this interim management statement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this interim management statement should be construed as a forecast, estimate or projection of future financial performance. This announcement contains inside information.

 

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