Schroders names new chairman and hikes dividend as pre-tax profit surges in 2015

Asset management group Schroders delivered a pleasant surprise to its shareholders, as it lifted its dividend for the year after its profit before tax grew solidly last year and assets under management increased.

In the 12 months to 31 December 2015, the FTSE 100 group said its profit before tax and exceptional items were up 8% year-on-year to £609.7m ($858.2m, €789.4m), from £565.2m, while profit before tax jumped 14% from the corresponding period in 2014 to £589m.

Schroders added it had a total of £315bn assets under management on 31 December, up from £300bn a year earlier, although its net inflows dropped during the year to £13bn from £24.8bn, while earnings per share were up 12% to 171.1p, from 152.7p.

Following the positive results, the board recommended a final dividend of 58p, taking the year's total dividend to 87p, a 12% year-on-year increase which is likely to please shareholders at a time when a number of FTSE 100 stocks have either scrapped or cut their dividends altogether.

The asset manager added institutional inflows have remained strong so far in 2016, even though they have been partially offset by intermediary outflows and tough market conditions, which have seen the interest rate hike by China's economic slowdown, low oil prices and fears of recession in the US and Europe.

"Markets will remain volatile in the face of these uncertainties with an inevitable impact on retail investor demand in the short term," the company said.

Meanwhile, the London-listed group confirmed Michael Dobson will replace Andrew Beeson as chairman, with current head of investment Peter Harrison set to replace the former as chief executive from 4 April 2016.

"Michael has enjoyed the strong support of the shareholders as chief executive, and we believe that he will, as chairman, continue to serve their interests as effectively as he has in the past," Philip Howard, senior independent director, said.

"The board does not regard this appointment as setting a precedent at Schroders, and the separation of the roles of chairman and chief executive remains in place."