Schroders (LSE:SDR) said on Thursday that its full-year 2025 results are now expected to come in ahead of market forecasts, with adjusted operating profit projected at no less than £745 million, up from £603.1 million in 2024. The upgrade, driven by higher income and stable costs, sent the asset manager’s shares up by more than 8%.
The UK-based group said adjusted net operating income is expected to reach at least £2.58 billion, compared with £2.44 billion a year earlier. Management fees benefited in the fourth quarter from a more favourable assets under management mix, supported by strong intermediary net new business.
“Improved income also reflects higher performance fees and carried interest, and positive market returns, including on seed investments,” the company said in its trading update.
Adjusted operating expenses are expected to remain broadly unchanged year on year at around £1.83 billion. Schroders said this reflects continued cost discipline and progress on its transformation programme, adding that it “remain committed to our transformation target of £150 million annualised net savings by the end of 2027.” As a result, the adjusted operating cost-to-income ratio is expected to improve to about 71%, compared with 75% in 2024.
Group assets under management are estimated at approximately £825 billion, including joint ventures and associates, up from £778.7 billion a year earlier. Excluding joint ventures and associates, assets under management are expected to total around £730 billion, compared with £661.8 billion in 2024. Schroders said the increase reflects market appreciation, investment performance and positive net new business of around £11 billion.
Within the divisions, Public Markets generated net new business of roughly £3.9 billion, reflecting “significantly improved flows versus the prior year across both intermediary and institutional channels.” Schroders Capital recorded net new business of about £4.0 billion, rising to around £4.5 billion when including an initial £0.5 billion contribution from Future Growth Capital. Dry powder in the unit increased by around £0.5 billion year on year to approximately £4.7 billion.
Wealth Management delivered net new business of about £3.4 billion, equivalent to a net new business rate of roughly 2.7%. Schroders said this performance came against “a backdrop of continued macro-economic and policy uncertainty,” with Benchmark flows remaining subdued in the fourth quarter. Within Cazenove Capital, UK private client net new business stayed within the group’s 5% to 7% target range, while the charities segment saw negative net flows as strong inflows were offset by a small number of low-margin outflows.
Leave a Reply