Schroders down on pessimistic outlook

Schroders, the FTSE 100 asset management firm has seen revenues and ''profits up on 2010 but the key "assets under management" figure (AUM) has remained static in the third quarter.

Revenues in the three months to the end of September were £290.4m yielding profits before tax of £101.6m. This compares to figures of £281.8m and $94.5m during the same period of 2010.

On the face of it then these figures look reasonable, however, profits have certainly slowed since the start of the year with the nine month figure of £317.3m showing how the third quarter has added less than a third of earnings.

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The big issue for a company like Schroders however is the AUM figure which stands at £182.2bn. This is down from £204.8bn at the end of June, a fall of 11% or £22.6bn on the back of the firm's investment performance. Given what has been happening in the Eurozone however this is not unexpected. Observers will be less concerned by the net flows figure with inflows from new investments cancelling out withdrawals.

In its outlook statement Schroders gives a pessimistic view of the immediate future: "Financial markets are likely to remain volatile with no sustained recovery in equities until we see some resolution to the uncertainties facing the Eurozone. Until such time, the environment in Intermediary and Private Banking will continue to be difficult with investors reluctant to commit funds to risk assets, and opportunities in Institutional will be held back although we expect to see a continuation of positive net flows from institutional clients."

At 08:25 Schroders share price was down 1.82% at 1,295p.

BS