Final Results

Schroders PLC
28 February 2001



Schroders plc

Announcement of Results for the year ended 31st December 2000

  * Underlying profit* before tax on continuing operations up 25.3% to £228.2   
    million (1999: £182.1 million)
  * Attributable profit on continuing operations £173.8 million (1999: £165.3   
    million)
  * Earnings per share on continuing operations of 58.6p (1999: 56.0p)
  * Total dividend maintained at 18.5p per share
  * Funds under management £132.5 billion (1999: £142.6 billion)
  * Significant improvement in investment performance

*before profit on sale of property businesses and amortisation of goodwill

                                                 Year ended        Year ended
                                                 31st December     31st December
                                                 2000              1999
                                                 £mn               £mn
    Profit before tax

    Asset management                              156.6             161.9

    Private equity                                 68.3              40.9

    Group interest income/(costs)                   3.3             (20.7)

    Underlying profit                             228.2             182.1

    Goodwill                                       (6.1)             (0.3)

    Sale of property businesses                     8.0              24.9

    Continuing operations                         230.1             206.7

    Discontinued operations - investment banking   45.2             117.3
    
                                                  275.3             324.0

    Tax                                           (53.8)            (80.2)

    Profit after tax                              221.5             243.8

    Minority interests                             (0.2)              0.8

    Profit attributable to shareholders            221.3             244.6

Commenting on the annual results, Peter Sedgwick, Chairman, said: 'The year
2000 was a challenging one for our asset management business, but one in which
we made significant progress in laying the foundations for future growth.

We are pleased to report that our relative investment performance improved
significantly in 2000 by comparison with 1998 and 1999. If this continues,
then we would hope to re-establish our path of growth in funds under
management by the end of 2001. We are confident that the steps we have taken
over the last year will provide strong growth in years to come'.

Contacts:

Schroders
Peter Sedgwick  Chairman                                  [phone]
David Salisbury Chief Executive                           [phone]
Nick MacAndrew  Chief Financial Officer                   [phone]
Julian Samways  Head of Corporate Communications          [phone]

GCI Financial
Rupert Ashe     [phone]

Commentary

At the start of the year, we announced the disposal of our investment banking
business to Salomon Smith Barney following which £904 million (304 p per
share) was distributed to shareholders.

The underlying pre-tax profits of our continuing operations were £228.2
million in 2000 compared with £182.1 million in 1999. Within this, the profits
of the asset management business in the second half of the year were £72.3
million, compared with £84.3 million in the first half.

The total dividend is maintained at 18.5p per share. The Board believes that,
given the changed nature of the Group's business, a lower level of dividend
cover than has previously been maintained is appropriate.

Funds Under Management

The year 2000 was a challenging one for our asset management business, but one
in which we made significant progress in laying the foundations for future
growth. Adverse market movements of £5.9 billion, notably in Asia Pacific and
Emerging Markets which comprise 24% of our assets under management, and a net
outflow of business (£4.2 billion) reduced funds under management to £132.5
billion at the end of the year, compared to £142.6 billion at 31st December
1999. This outflow was concentrated in our institutional business. Retail
funds under management grew by some 20% over the course of the year to £10.8
billion.

We are pleased to report that our relative investment performance improved
significantly in 2000 by comparison with 1998 and 1999. Whilst there are
inevitable lags in the impact of performance upon asset growth, we are
enjoying an improved level of new business interest. If our relative
performance continues to improve, then we would hope to re-establish our path
of growth in funds under management by the end of 2001.

Institutional Fund Management

There was an improvement in investment performance across our main
institutional specialist products comprising some 75% of assets under
management. In particular, we delivered stronger performance in UK,
Continental Europe, Asia Pacific equities and core bond products. Our
multi-asset or 'balanced' products in the UK also performed better than
industry medians.

In Continental Europe we continued to maximise opportunities for growth with a
presence in 12 countries which has provided a significant rise in
institutional asset flows. An excellent year's investment performance was also
achieved for many of our North American clients, with performance in Europe,
Australasia and Far East (EAFE) international mandates particularly strong,
which should bode well for future new business flows.

Progress was made in Asia in developing a presence in new markets. We received
preliminary approval for our application to the Korean Authorities to
establish a fund management subsidiary in Korea, and undertook collaborative
work with mainland Chinese companies which may lead, in due course, to the
establishment of a joint venture.

In Japan we maintained our position as a leading foreign pension fund manager,
whilst in December 2000 we were appointed one of four fund managers to manage
Mandatory Provident Fund assets for Hong Kong Government employees. In
Australia, having established a new management team with good domestic equity
performance, business flows are increasing.

Retail Fund Management

Our retail business also generated an improvement in investment performance in
2000 and consequent growth in new business flows. In the UK gross sales rose
by 50% in 2000 with a net inflow of assets compared with a small outflow in
the previous year. We expanded our share of the retail market, with our share
of gross sales in the intermediary and unitised sector rising by 18%. We
broadened our product range with the launch of two industry funds (healthcare,
technology), and a series of style funds and, at the turn of the year,
introduced a major new advertising campaign targeted, in particular, at the
ISA season.

Through the purchase of Liberty Pensions, rebranded Schroder Pensions, we are
seeking to establish ourselves in the forefront of provision of services to
defined contribution pension schemes in the UK. We received regulatory
approval for our stakeholder products early in the New Year and expect to
introduce a fully online pensions administration service during the course of
2001.

Improved investment performance across our comprehensive range of mutual funds
in Luxembourg, combined with strengthened sales and marketing teams, provided
the base for growth of assets in the expanding markets of Continental Europe.
New business in Continental Europe exceeded £1.5 billion in 2000 and net funds
under management increased by 80% to £3.3 billion. Funds in both Europe and
Asia gained investment performance awards which assisted our marketing
strategy during the year.

Over 250 distribution partnerships are now in place across Continental Europe
with banks, insurers and e-intermediaries. A major alliance has recently been
formed in Italy: we were appointed to manage funds for the Italian Post
Office, which should be a significant source of new business growth over the
medium term.

In Japan, a new range of funds targeted at long term savers was launched
supported by an innovative TV and press campaign. In the rest of the Asia
Pacific region we continued to strengthen our links with major regional
distribution partners.

Private Banking

The European market for private banking services is forecast nearly to double
to £7.5 trillion by 2005 with similar or faster rates of growth projected for
the rest of the world. We have a powerful franchise in this market which
ensures we are well placed to benefit from the growing demand for bespoke
private banking operations and the increasing emphasis on a sophisticated,
global approach to personal asset management.

Following the sale of our investment banking activities we established
Schroder & Co., a UK authorised banking institution at the beginning of
November. Schroder & Co. combines our private client loan and deposit taking
activities and private investment management business in London and
complements our private banking businesses in Switzerland and the Channel
Islands. In addition, we are strengthening our local client service teams in
Italy, Germany, Spain and France to focus on the expanding European market.

We now have a private banking group which is capitalised at £160 million and
manages over £6 billion for private clients around the world. Despite the
disruption arising from the changes in our corporate stucture, the private
banking group increased revenues and funds under management, with a
particularly strong contribution from our Swiss operation.

Private Equity and Alternative Investments

At our interim results announcement we set out a key objective of extending
our product range, both in mainstream products and alternative investments.
The year saw an exceptionally strong contribution of £68 million from our
private equity interests, comprising carried interest and portfolio investment
realisations of £48.2 million and £19.8 million from the increased market
valuation of the Group's holding in Schroder Ventures International Investment
Trust plc. 3.3 billion was raised for Schroder Ventures European Fund II
during the year, and £4.2 billion is now committed globally across 24 funds.

Against the background of a greater interest in alternative investments from
both private and institutional investors, the Group launched a series of hedge
funds in the Autumn of last year and preparations are underway for a private
equity fund of funds in the Spring of this year. Schroder Properties also
launched a series of new funds, offering specialist exposure to residential,
City of London and retail warehouse properties.

Costs

Setting the Group firmly on its new footing has required new investment of two
types. First we have taken steps to establish a range of products and services
consistent with our ambition to be a leading provider of retail investment and
private banking services and to raise the brand awareness of Schroders.
Second, we have initiated a programme of investment in and outsourcing of
operational functions where we believe efficiencies can be gained. In the
short term, these investment programmes have added significantly to our costs.

In addition, our industry continues to experience broader cost inflation at a
time when stockmarkets have fallen. There is no alternative to tackling this
directly and, since the turn of the year, we have initiated a review of all
our operations with the intent of ensuring that our operating expenditures are
concentrated in the areas of greatest value-added. Our objective is to achieve
a competitive underlying cost: income ratio.

Proposed Final Dividend

A final dividend of 13p per share, making a total of 18.5p per share for 2000
will be paid on 23rd April 2001 to shareholders on the register at close of
business on 16th March 2001 subject to approval at the Annual General Meeting
on 18th April 2001.

Conclusion

The year 2000 marked a substantial change in the Group and we would like to
thank our employees for their commitment to launching our new strategy. In
recognition of the importance of recruiting, retaining and rewarding staff of
the highest calibre, we have introduced new worldwide share ownership and
incentive schemes.

In the short term the effects of lower stockmarkets and last year's fall in
assets under management, together with our increased investment in the
business, mean that earnings both from our mainstream asset management
business and from private equity are expected to be lower in the current year.
We are confident, however, that the steps we have taken over the last year,
together with continuing improvements in investment performance, will provide
strong growth in years to come.

    Peter Sedgwick                              David Salisbury
    Chairman                                    Chief Executive
    28th February 2001

Consolidated Profit and Loss Account
For the year ended 31st December 2000

                                     2000                          1999
              Notes Continuing Discontinued Total Continuing Discontinued Total
                    operations operations         operations operations 
                         £mn        £mn     £mn        £mn      £mn      £mn
    Interest            
    receivable


    Interest          13.9        7.5      21.4        8.8      50.3      59.1 
    and
    similar
    income
    receivable
    from debt
    securities

    Other            115.3      181.4     296.7      76.7      478.1     554.8
    interest
    and
    similar
    income
    receivable
                     129.2      188.9     318.1      85.5      528.4     613.9

    Interest         (79.9)    (138.7)   (218.6)    (62.8)    (420.4)   (483.2) 
     payable
                     
    Net interest      49.3       50.2      99.5      22.7      108.0     130.7
    income
                                                                        
    Dividend           0.7        0.2       0.9       0.3          -       0.3
    income

    Fees and         620.5      165.0     785.5     518.5      703.6   1,222.1
    commissions
    receivable
                     
    Fees and         (81.3)      (1.2)    (82.5)    (44.9)     (73.8)  (118.7)
    commissions
    payable
                     539.2      163.8     703.0     473.6      629.8  1,103.4

    Net dealing        5.8       41.3      47.1       3.3       85.5     88.8   
    income
                           
    Other
    operating         89.3       (0.6)     88.7      52.0        5.3     57.3
    income

    Operating        684.3      254.9     939.2     551.9      828.6  1,380.5
    income
                    
    Operating       (426.9)    (217.0)   (643.9)   (345.7)    (702.6)(1,048.3)
    expenses         

                      
    Depreciation     (39.0)      (3.6)    (42.6)    (39.4)      (8.7)   (48.1)

    Amortisation      (6.1)         -      (6.1)     (0.3)         -     (0.3)
    of goodwill

    Operating        212.3        34.3    246.6     166.5      117.3    283.8
    profit
                   
    Profit on sale 1     -        10.9     10.9         -          -       -
    of the
    investment         
    banking
    business
                       
    Profit on sale     8.0          -       8.0      24.9          -     24.9
    of property
    businesses

    Income from        9.8          -       9.8      15.3          -     15.3
    shares in
    associated
    undertakings

    Profit on        230.1        45.2    275.3     206.7      117.3    324.0
    ordinary
    activities
    before tax       
                   
    Tax on profit  2 (56.1)        2.3    (53.8)    (41.5)     (38.7)   (80.2)
    on ordinary
    activities

    Profit on        174.0        47.5    221.5     165.2       78.6    243.8
    ordinary
    activities        
    after tax

    Minority          (0.2)          -     (0.2)      0.1        0.7      0.8
    interests

    Profit           173.8        47.5    221.3     165.3       79.3    244.6
    attributable
    to               
    shareholders

    Dividends        (54.1)          -    (54.1)    (53.9)         -    (53.9)

    Profit           119.7        47.5    167.2     111.4       79.3    190.7
    retained by
    the Group for
    the financial
    year

    Basic earnings    58.6p                74.6p     56.0p               82.8p
    per share

    Diluted           58.3p                74.2p     55.7p               82.5p
    earnings per
    share

    Dividend per                           18.5p                         18.5p
    share

Statement of Total Consolidated Recognised Gains and Losses

For the year ended 31st December 2000

                                                               2000      1999
                                                                £mn       £mn
    Profit for the financial year                              221.3    244.6

    Exchange translation adjustments to foreign currency net    30.1      6.3
    investments
    Total recognised gains and losses                          251.4    250.9

Reconciliation of Movements in Consolidated Shareholders' Funds

For the year ended 31st December 2000

                                                                2000     1999
                                                                 £mn      £mn
    Profit for the financial year                               221.3   244.6

    Dividends                                                   (54.1)  (53.9)
                                                                167.2   190.7

    Exchange translation adjustments                             30.1     6.3

    Reduction in capital via Scheme of Arrangement             (470.8)      -

    New share capital subscribed                                  8.1     3.8
                                                                  
    Goodwill written back to profit and loss account             55.5       -
                                                                 
    Other movements                                               0.7    (0.9)
                                                                  
    Net (decrease) increase in shareholders' funds             (209.2)  199.9

    Equity shareholders' funds brought forward                1,370.4 1,170.5

    Equity shareholders' funds carried forward                1,161.2 1,370.4

Consolidated Balance Sheet

31st December 2000

                                                    2000            1999
                                                £mn      £mn     £mn     £mn
    Fixed assets                                         

    Intangible assets - goodwill                         41.8            16.8

    Tangible assets                                      94.1           123.3
                                                        
    Investments                                         303.2         1,120.0
                                                      
    Insurance assets attributable to unit linked      3,119.2               -
    policyholders
                                                      3,558.3         1,260.1
    Current assets                            

    Debtors due within one year               720.6          4,857.7

    Debtors due after more than one year      279.2            843.1

    Investments                               241.8          5,014.6

    Cash and balances with banks            1,152.0          1,426.8
                                            2,393.6         12,142.2
    Creditors - amounts falling due 
    within one year                        (1,587.8)       (10,426.2)
    
    Net current assets                                  805.8       1,716.0
    Total assets less current liabilities             4,364.1       2,976.1

    Creditors - amounts due after more than one         (33.0)     (1,542.8)
    year

    Insurance liabilities attributable to unit       (3,119.2)            -     
    linked policyholders                                   

    Provisions for liabilities and charges              (50.3)       (60.6)
                                                             
    Net assets                                        1,161.6      1,372.7

    Capital and reserves                                

    Called up share capital                             296.9        295.4

    Reserves                                            864.3      1,075.0

    Equity shareholders' funds                        1,161.2      1,370.4

    Minority interests                                    0.4          2.3

    Total shareholders' funds including minority      1,161.6      1,372.7
    interests

Consolidated Cash Flow Statement

For the year ended 31st December 2000

The format and definitions of the cash flow statement required by Financial
Reporting Standard FRS1 during 2000 are not wholly appropriate to the
operations of the Group. In particular, the disposal of the investment banking
business has resulted in significant movements in operating assets and
liabilities.

                                                               2000   1999
                                                                £mn    £mn
    Net cash (outflow) inflow from operating activities      (692.6)    2.7

    Dividends received from associates                          0.1     0.1

    Returns on investments and servicing of finance

    Interest paid on corporate debt                            (2.7)   (5.3)

    Dividends paid to minority interests                          -    (1.0)

    Net cash (outflow) from returns on investments 
    and servicing of finance                                   (2.7)   (6.3)
    
    Taxation

    United Kingdom corporation tax paid                       (45.0)  (46.3)

    Overseas tax                                              (17.4)  (11.7)

    Total tax paid                                            (62.4)  (58.0)

    Capital expenditure and financial investments

    Tangible fixed assets -purchases                         (103.4) (143.0)

                                                              
                          -disposals                          116.5    80.0
                                                             
    Fixed asset investments -purchases                       (300.3) (770.8)
                                                            
                            -disposals                      1,132.3   127.8     
       
                                                             
    Other investments -purchases and subscriptions           (129.6)  (51.8)  

                      -sales                                   74.0   315.3

    Net cash inflow (outflow) from capital 
    expenditure and financial                                 789.5  (442.5)
    investments

    Acquisitions and disposals

    Associated undertakings -subscriptions and acquisitions   (10.5)   (6.2)

                            -disposals                            -     3.7

                                                                
        Sale of property businesses                             8.0    34.0
                                                              
        Subsidiaries -acquisitions                            (66.6)  (27.0)
                                                               
        -disposal of the investment banking business          547.6     -

    Net cash inflow from acquisitions and disposals           478.5     4.5

    Dividends paid                                            (54.3)  (49.6)

    Financing

    Share capital issued                                        8.1     3.8

    Senior loan notes issued                                      -   154.1

    Decrease in debt                                         (158.8)      -

    Repayment of promissory notes                                 -    (1.2)

    Net cash (outflow) inflow from financing                 (150.7)  156.7

    Increase (decrease) in cash                               305.4  (392.4)

Notes to the Accounts

The figures and financial information for 1999 have been reclassified into a
Schedule 4 to the Companies Act 1985 format from their previous Schedule 9
format following the disposal of the investment banking business. In the
opinion of the Directors disclosure of turnover is most appropriately
represented by interest income, fees and commissions, net dealing income and
other operating income. This represents an adaption of the profit and loss
account format laid down in Schedule 4.

During the year there was a capital reorganisation that required a new parent
company for the Group. This has been accounted for using merger accounting
principles.

The disposal of the investment banking business has materially impacted the
presentation of the accounts for the year ended 31st December 2000 and
distorted comparison with prior periods, particularly the consolidated balance
sheet and cash flow statement.


    1. Profit on sale of the investment banking business

                                                                           2000
                                                                            £mn
    Amount of premium received on disposal of the investment banking     140.8
    business
    Profit on sale of Schroder Leasing                                    51.1
                                                                         191.9
    Write-back of goodwill previously eliminated against reserves        (55.5)
                                                                         136.4
    Transaction costs (pre-tax)                                         (125.5)
    Profit on disposal of the investment banking business                 10.9


    2. Taxation

                                                               2000        1999
                                                                £mn         £mn
    United Kingdom                                             31.3        50.4

    Overseas                                                   22.5        29.8
                                                               53.8        80.2

Segmental reporting - by class of business

                                                   2000
                                                   £mn
                  Asset    Private Goodwill  Group     Total    Investment Total
                Management equity            costs/    continuing  banking
                                             interest  business
Operating income    599.0    68.1        -     17.2      684.3      254.9 939.2

Operating profit    156.6    58.5    (6.1)      3.3      212.3       34.3 246.6


        Sale of         -       -        -        -          -       10.9  10.9
        investment
        banking
        business       

        Sale of       8.0       -        -        -        8.0          -   8.0
        property
        businesses       

        Income from     -     9.8        -        -        9.8          -   9.8
        associated
        undertakings

Profit on           164.6    68.3    (6.1)      3.3      230.1       45.2 275.3
ordinary
activities
before tax          

Tax on profit on    (53.1)   (2.0)      -      (1.0)     (56.1)       2.3 (53.8)
ordinary
activities

Profit on           111.5    66.3    (6.1)      2.3      174.0      47.5  221.5
ordinary
activities after
tax

Shareholders'       402.0   124.4    41.8     593.0     1161.2        -  1161.2
funds

                                                   1999
                                                   £mn
             Asset      Private Goodwill  Group    Total       Investment Total
             Management equity            costs/   continuing  banking
                                          interest business
Operating income  521.6    27.1        -      3.2      551.9      828.6 1,380.5

Operating profit   161.8    25.7    (0.3)    (20.7)     166.5      117.3   283.8


        Sale of    24.9       -        -        -       24.9          -    24.9
        property
        businesses  

        Income from 0.1    15.2        -        -       15.3          -    15.3
        associated
        undertakings

Profit on         186.8    40.9    (0.3)    (20.7)     206.7      117.3   324.0
ordinary
activities
before tax        

Tax on profit on  (46.6)       -      -       5.1      (41.5)     (38.7)  (80.2)
ordinary
activities

Profit on         140.2    40.9    (0.3)    (15.6)     165.2       78.6   243.8
ordinary
activities after
tax

Shareholders'     186.6    95.7    16.8     472.4     771.5      598.9  1,370.4
funds

The total figures for Asset Management in the period include the following
amounts relating to the acquisition of Schroder Pensions Limited (formerly
Liberty International Pensions Limited): operating income £1.1 million,
operating expenses £4.0 million and operating loss £2.9 million.

Five year financial summary

                                         2000   1999     1998    1997    1996
                                          £mn    £mn      £mn     £mn     £mn
    Operating income                    939.2 1,380.5 1,111.3  1,058.6    958.4

    Profit before tax                   275.3   324.0   231.7    244.9    238.7

    Tax                                 (53.8)  (80.2)  (62.5)   (68.4)   (54.7)

    Profit after tax before minority    221.5   243.8   169.2    176.5    184.0
    interests
                                           
    Minority interests                  (0.2)     0.8   (1.4)     (5.6)    (4.8)

    Profit for the year                221.3    244.6   167.8    170.9     179.2

    Earnings per share
    Basic earnings per share (pence)*   74.6     82.8    57.2     58.3      61.3
    Diluted earnings per share (pence)* 74.2     82.5    56.9     57.9      60.9

    Dividends
    Cost (£mn)                          54.1     53.9     48.3     45.0     39.1
    Per share (pence)*                  18.5     18.5     16.5     15.3     13.3

    Total assets (£mn)               5,951.9 13,402.3 13,588.6 10,655.5 10,370.7
    Shareholders' funds (£mn)        1,161.2  1,370.4  1,170.5  1,046.3    941.1

    Net assets per share* (pence)        391      464      397      356      321

* adjusted for capitalisation issue in 1998

The financial information for 2000 included in this statement does not
constitute the full Group Accounts for the Company for the year ended 31st
December 2000. The preliminary results for the year ended 31st December 2000
are unaudited.

The financial information from 1999 is derived from the Group accounts for the
year ended 31st December 1999 which have been delivered to the Registrar of
Companies and which include the auditors' report thereon which was
unqualified. The full 2000 Group Accounts will be delivered to the Registrar
of Companies after adoption at the Annual General Meeting to be held at 31
Gresham Street, London, EC2V 7QA.

Further copies of this statement are available from the Company Secretary at
31 Gresham Street, London EC2V 7QA, telephone [phone] and on the
Company's website at www.schroders.com.