Schroders Almost Doubles Profit In 2014, Boosted By Cazenove Capital Input

Tom Burroughes

5 March 2015

, the London-listed firm, today announced a near-doubling of pre-tax, pre-exceptional items profit at its wealth management arm to £61.7 million ($94 million) in 2014 from £34.3 million a year earlier, enjoying the full-year contribution to results from its acquisition over a year ago of Cazenove Capital.

On the asset management side, the firm reported pre-tax profit of £499.3 million, up from £468.6 million, it said in a statement.

“2014 was a strong year for Schroders with high levels of net new business and increased profit, as we benefited from the diversity of our business across a broad range of asset classes, client channels and regions,” the firm said.

Schroders agreed to buy Cazenove Capital in 2013 - part of an industry merger and acquisition trend that has seen a number of wealth management firms make such deals.

Across the whole business group, net revenue increased by 9 per cent to £1.531 billion (2013: £1.407 billion) and profit before tax and exceptional items increased by 11 per cent to £565.2 million (2013: £507.8 million).

Schroders won net new business of £24.8 billion (2013: £7.9 billion) and assets under management rose by 14 per cent to £300.0 billion (2013: £262.9 billion).

In wealth management, net revenue increased 42 per cent to £213.5 million (2013: £150.0 million), including performance fees of £2.9 million (2013: £0.4 million) and a release of £6.1 million of loan loss provisions.

Exceptional items of £20.4 million (2013: £30.9 million) related principally to integration costs and the amortisation of the value of client relationships acquired with Cazenove Capital.

Schroders reported net inflows in its wealth arm of £0.5 billion (2013: net outflows £1.5 billion); assets under management at the wealth business ended the year at £31.1 billion (2013: £30.1 billion).

In the asset management side of the business, AuM in the institutional business ended the year at £171.1 billion (2013: £144.3 billion); on the intermediaries side, AuM rose to £97.8 billion from £88.5 billion.

The firm’s board is recommending a final dividend of 54.0 pence per share bringing the total dividend for the year to 78.0 pence per share (2013: 58.0 pence), an increase of 34 per cent, Michael Dobson, chief executive, said.