Net inflows drive double-digit first quarter profit gain at Schroders

Inflows at its asset management arm drove a double digit gain in profits at fund manager Schroders in the first quarter, leading analysts to cautiously revise their forecasts for full-year earnings higher.

In the first quarter of 2015 the firm registered £5.1bn in net inflows which drove a 6.5% increase in total assets under management (AuM) to £319.5bn.

Net inflows of £4.9bn at the AM arm where split between £2.0bn in institutional and £2.9b in intermediary.

The remaining £0.2bn of inflows were accounted for by the wealth management unit.

Schroders total profits before tax and exceptionals improved by 14% to reach £149.6bn (company collated consensus: £149.8m).

Net revenues at the asset management (AM) arm rose 13.8% to £348.5m and by another 3.7% to £52.2m at its wealth management unit. In asset management the tally for AuM as of the end of March stood at £286.9bn.

“We note the relatively low figure for net inflows in wealth management of £0.2bn (0.6% of opening AuM) which would be underperforming most UK peers,” analyst Clive Black at Shore Capital wrote in reaction to the results.

However, Black notes the fact that the company’s total AuM now seem to be headed for a better close to the year than he had previously estimated – given the strong performance put in by the major equity markets such as Europe and Japan in the first quarter.

On a provisional basis the analyst bumped his forecast for full-year growth in total AuM to 8% which his spreadsheets showed would translate into upwards revisions to his estimates for earnings per share in 2015 in the range of 2-4%.

As of 08:28 shares in Schroders were off by 1.32% to 3,207p.