Coming on the back of the continued integration of its wealth management business with that of Cazenove Capital, net revenues for the business group rose 88% to £100.5m, while pre-tax profit more than doubled to £26.3m.
The business also saw net inflows of £300m, which pushed up assets under management to £30.7bn as at the end of June.
However, while Schroders remains positive about the growth potential in this business, CEO, Michael Dobson was careful to manage expectations.
“I don’t think you should extrapolate 300m per quarter, in wealth management but this business is well positioned, with two very good businesses operating together well,” he said during the question and answer session following the release of the group’s half year results.
On the asset management side, net revenues rose 6% to £621m. This number included a slight decline in performance fees, from £11.8m to £8.3m.
Net inflows in the group’s institutional business were £700m in the six months, which, the group said reflected small net outflows in the second quarter “principally due to outflows in commodities which reflected a challenging environment for this asset class”.
Assets under management in Institutional at the end of June were £148bn, the group said.
As a result of the strong performance the group declared an interim dividend of 24.0 pence per share, up from 16p per share in the previous comparable period.
“This is in line with our target of a higher payout ratio and a rebalancing towards the interim dividend following greater increases in the final dividend in recent years,” the group said.
According to Dobson, the group is not contemplating a one-off distribution of capital, despite its strong cash position, as the board is of the belief that a progressive and growing normal dividend policy is a better way of growing shareholder value.
Looking ahead, Schroders said, while it remains positive and has generated good levels of intermediary flows so far in July, it remained cautious, especially in the retail space.
“The short-term outlook for retail investor demand is uncertain given no clear trend in markets. In Institutional, we have more visibility with a significant pipeline of new business won but which has not yet been funded. We continue to see a wide range of growth opportunities across our business in the longer term,” it said.
