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Investing.com -- Schroders PLC (LON:SDR) on Thursday reported first-half 2025 adjusted operating profit 5% ahead of consensus estimates, driven by in-line revenues and 1% better cost management.
Within the operating profit mix, Asset Management came in line with expectations while Wealth Management was 16% ahead. Core net flows excluding joint ventures were slightly lower at £4.5 billion compared to consensus expectations of £5.1 billion.
The company has made progress on its cost savings plan, reducing operating expenses by £21 million in the first half of 2025, net of £8 million reinvested in the business. Schroders now expects to deliver approximately £50 million of in-year savings in 2025, while maintaining its target of £150 million in annualized net cost savings by 2027.
Group assets under management (AUM) came in at £777 billion, in line with consensus expectations of £773 billion, with core AUM excluding joint ventures at £671 billion. Group net new money was better than expected at -£1.0 billion versus consensus of -£4.9 billion.
Within Asset Management, public markets net new money was negative at -£0.5 billion, driven by net inflows in equities of £3.5 billion (including funding of the St James (LON:SJP)’s Place mandate of £4.0 billion and a £3.3 billion mandate from a European pension provider) and core solutions (+£1.6 billion).
These were offset by outflows in Fixed Income (-£2.0 billion, driven by outflows in US Fixed Income) and Multi-asset (-£3.6 billion).
Schroders Capital performed in line with expectations with inflows of £2.3 billion, while Wealth Management also met expectations with inflows of £2.7 billion. Joint ventures flows were significantly better at -£5.5 billion compared to consensus of -£10.1 billion.
Net operating revenues were in line with expectations at £1,170 million, with Asset Management revenues at £912 million (fee margin of 33 basis points) and Wealth Management revenues at £258 million. Performance fees and carry were lower at £21 million compared to consensus of £26 million.
Adjusted net operating income was 1% ahead at £1,213 million, with operating expenses 1% lower at £898 million, resulting in an adjusted cost-to-net income ratio of 74%.