Schroders pleases the market with bumper full year earnings

Shares in British fund manager Schroders rose by 2.4% to 3102p early Thursday after the group bumped up its assets under management (AUM) by 14% in 2014, driven by net inflows of £24.3bn.

The group’s overall net profit increased to £413.2m last year from £352.7m in 2013 while net revenues rose to whopping £1.53bn in 2014 from £123.6m.

That saw the British fund manager's AuM rise by 14% to £300bn thanks to its asset management arm which drove net inflows of £24.3bn. That’s a huge jump from the £7.9bn of net inflows of 2013.

Net inflows were driven by “competitive investment performance across a broad product range and strong distribution,” said Michael Dobson, chief executive.

The group highlighted that £16.9bn of net inflows went into its multi-asset range, while £4.7bn went into fixed income and £4.5bn into equities. It noted, however that net outflows from commodities stemmed from the “challenging environment in this asset class”.

As a result of the strong earnings, the asset manager is paying a 78p dividend for the year, a 34% increase on 2013. “2014 was a record year for Schroders. We believe our focus on building a diversified business across a broad range of investment strategies will continue to deliver value for clients and shareholders over the long term,” said Dobson.

Numis Securities described the full year earnings as ‘excellent’. “Schroders is by far the most diversified UK listed asset manager and has one of the strongest balance sheets. Its unique ownership structure (around 45% of the votes controlled by the family) helps foster genuine long term management decision making,” added Numis.