LONDON (Reuters) – Tepid inflows of client cash took the shine off forecast-beating first-half pretax profit for Schroders (SDR.L), sending shares in the British asset and wealth manager lower on Thursday.
One of Europe’s biggest standalone investment firms, Schroders has looked to expand into new markets and products in recent years and said this had helped it weather a tough market that had prompted outflows from some equity mandates.
Stock fund outflows mirrored the experience of peers including BlackRock (BLK.N) as concerns about global trade and the potential for U.S. rates to rise faster than expected made investors more cautious towards the middle of the year.
“(Schroders) had a good operating performance, less good net flows and better investment performance than we had forecast,” Jefferies analyst Phil Dobbin said in a note to clients, flagging a ‘buy’ rating and 3,955 pence price target.
At 0725 GMT, Schroders shares were down 1.4 percent at 3,176 pence, among the top fallers on the FTSE 100 .FTSE.
Pretax profit in the six months to end-June was 371.1 million pounds ($489.85 million), up from 342.8 million pounds a year earlier, helping underpin a 3 percent increase in the interim dividend to 35 pence a share.
Assets under management and administration in the period rose by a net 1.2 billion pounds to 449.4 billion pounds, with inflows from North American clients and multi-asset strategies partially offset by outflows in Europe and from equity mandates.
“Against a challenging backdrop we have delivered robust revenue growth through our strategy of focusing on new markets and by continuing to evolve our products and solutions,” Chief Executive Peter Harrison said in a statement.
Reporting by Simon Jessop; editing by Sinead Cruise and Jason Neely