Everyone likes a dividend hike, and few people would turn their noses up at the 50% increase in its interim dividend that Schroders (LSE: SDR) provided this morning.
Although Schroders is looking to raise its overall payout level, a good portion of this increase represents a rebalancing between the interim and final dividend. So investors certainly shouldn’t expect a similar 50% increase when the final dividend is announced early in 2015.
Assets on the rise
Schroders had plenty of other good news to report today. Underlying profits and assets under management both grew by an impressive 15%. The latter now stands at £271.5 billion and could grow further in the second half of the year, as Schroders said a number of recent institutional client wins had yet to be funded.
The direction of the markets will also have a big impact on this key figure. Markets have certainly been buoyant in the last few years but in a telephone interview with Reuters, Schroders said there was “an uneasy calm” among investors at present.
Like many companies reporting recently, the strength of sterling was called out as a factor. In Schroders’ case, it knocked an estimated £18m off pre-tax profits of £234m.
Despite the decent results, the brief text surrounding these figures struck a generally cautious tone. That may explain why Schroders’ shares slipped back to 3% to 2,416p this morning. So, with full-year earnings per share expected to be in the region of 160p or so, the shares trade on a forward price-earnings ratio of 15 times.
