Final Results
Schroders PLC
02 March 2007
Press Release 2 March 2007
Schroders plc
Preliminary Results to 31 December 2006 (unaudited)
Profit before tax up 16 per cent. Underlying+ profit up 26 per cent.
• Profit before tax £290.0 million (2005: £250.7 million, £230.3 million
underlying+)
• Asset Management profit before tax £219.0 million (2005: £193.9 million,
£173.8 million underlying+)
• Private Banking profit before tax £26.9 million (2005: £6.3 million,
£6.0 million underlying+)
• Private Equity profit before tax £34.6 million (2005: £40.3 million)
• Funds under management £128.5 billion (31 December 2005: £122.5 billion)
• Final dividend of 17.5 pence per share (final dividend 2005: 14.5 pence
per share)
Year ended Year ended
31 December 2006 31 December 2005
£mn £mn
_______________________________________________________________________________________________
Asset Management profit 219.0 193.9
Private Banking profit 26.9 6.3
Private Equity profit 34.6 40.3
Group profit 9.5 10.2
_______________________________________________________________________________________________
Profit before tax 290.0 250.7
_______________________________________________________________________________________________
Funds under management (£bn) 128.5 122.5
_______________________________________________________________________________________________
Total dividend (pence) 25.0 21.5
_______________________________________________________________________________________________
+ In this announcement the term 'underlying' denotes that the relevant 2005
comparative has been adjusted to remove the impact of the one-off gain recorded
in 2005 on the discontinuation of a project to outsource the UK custody and
portfolio accounting services. The effect of this adjustment is to reduce
profit before tax in 2005 by £20.4 million (split between £20.1 million in the
Asset Management segment and £0.3 million in Private Banking).
Contacts:
Schroders
Michael Dobson Chief Executive +44 (0) 20 7658 6962
Jonathan Asquith Chief Financial Officer +44 (0) 20 7658 6565
Henrietta Jowitt Head of Marketing and Communications +44 (0) 20 7658 6166
The Maitland Consultancy
William Clutterbuck +44 (0) 20 7379 5151
Management Statement
We expected 2006 to be a year of consolidation after four years of rapid growth
in profit and with a programme of investment underway to position the firm for
longer term growth. It is very pleasing therefore to report another year of
significantly higher profit, a further increase in gross margins as we pursue
our strategy of focusing on higher margin business, a major step forward in
private banking and two acquisitions which extend our offering in alternative
investment areas.
Group profit before tax at £290.0 million (2005: £250.7 million) was up 16 per
cent., with underlying profit up 26 per cent. excluding the one-off payment
received in 2005 for the termination of an outsourcing contract.
Underlying Asset Management profit was up 26 per cent. to £219.0 million and
underlying Private Banking profit increased more than four times to £26.9
million. Private Equity profit was £34.6 million (2005: £40.3 million). Funds
under management ended the year up 5 per cent. at £128.5 billion (2005: £122.5
billion).
Asset Management
Revenues and profit increased in Asset Management as we concentrate on higher
margin products and sales channels. New business won in Institutional came in on
average fees which were 31 per cent. higher than the fees charged on business
lost, and we returned to growth in the higher margin Retail channel with £3.8
billion of net sales. Asset Management gross profit margins moved up to 55 basis
points (2005: 51 basis points).
We had a very successful year in our Retail business with a resumption of
significant net inflows after the hiatus of 2005. In European equities, strong
performance across a range of products and a strengthened investment team
resulted in net inflows of £2.0 billion. In the UK, Retail had a record year
with net inflows of £1.4 billion including sub-advisory business, and our market
share of net fund flows from the independent intermediary sector was 5 per
cent., up sharply on 2005. We also had net inflows in Retail in continental
Europe and Asia Pacific and in our first year in the intermediary business in
the US. Funds under management in Retail ended the year at £42.5 billion (2005:
£36.0 billion).
Net outflows in Institutional were £8.0 billion and included UK balanced
mandates where the industry continues to restructure. At the same time we are
seeing good flows into 'new balanced', our diversified growth offering for
institutional clients which encompasses alternatives as well as traditional
asset classes and third party as well as Schroders products. The largest
institutional outflows were in Japanese equities on the back of recent weak
returns after a long track record of outperformance. We have taken steps to
address these performance issues but in the short term we expect to see further
outflows. By contrast, we had net institutional inflows into European equities
of £1.1 billion. Funds under management in Institutional ended the year at £77.4
billion (2005: £78.7 billion).
Non-UK clients now account for 56 per cent. of our assets under management, up
from 43 per cent. five years ago, and we see further excellent growth
opportunities in our international business. We have a highly profitable and
rapidly expanding business in Latin America with assets under management of £2.1
billion. We have one of the fastest growing joint venture fund management
companies in China with our partner, Bank of Communications, which has seen
significant net inflows not included in our net new business flows because of
our minority (30 per cent.) position. In 2007, we plan to open offices in Dubai
to serve our expanding base of Middle Eastern clients, and in India to access
the rapidly growing funds market.
NewFinance Capital (NFC), the funds of hedge funds business we acquired in May
2006, has made good progress. We merged our existing funds of hedge funds
business into NFC, assets under management now total £1.9 billion, investment
performance has been strong and we are seeing a good pipeline of new business
opportunities.
At the end of 2006 we announced the acquisition of Aareal Asset Management, a
continental European property business with EUR1.9 billion under management for
institutional clients, which was successfully completed at the end of February
this year. At a time when institutional clients are seeking to broaden their
exposure in Europe, this opportunity represents a good strategic fit with our
existing Property business which has £8.2 billion under management,
predominantly in the UK.
Private Banking
We saw a major advance in the contribution from our Private Banking business in
2006. With revenues up 33 per cent. to £98.5 million and costs only marginally
higher than in 2005, underlying profit increased sharply to £26.9 million (2005:
£6.0 million). Revenue growth came from good increases in investment management
revenues in London and Switzerland and significantly higher banking fees in
London. We are on target with the planned move of our back office operations to
Zurich, which will lead to important improvements in both client service and
cost effectiveness from the second half of 2007.
Private Banking now accounts for nearly 10 per cent. of total profit, a
significant increase on recent years as a result of a distinctive offering for
private clients drawing on Schroders' wide ranging investment expertise and
banking skills, a clear focus on the UK and continental Europe from our
principal private banking offices in London, Guernsey, Geneva and Zurich, and
tight control of costs. We expect the share of total profit generated by Private
Banking to increase. Net new business in 2006 amounted to £0.4 billion and funds
under management ended the year at £8.6 billion (2005: £7.8 billion).
Group
In 2006 we achieved total returns of £107.6 million (2005: £86.8 million) on our
investment capital which totalled £789.0 million at the year end, an average
return of 14 per cent. (2005: 11 per cent.). Within these returns, £75.7 million
was reflected in realised profits while the unrealised balance of £31.9 million
was added to shareholders' equity, to be taken to profit as it is realised in
future years (2005: £84.8 million realised and £2.0 million unrealised).
Investment capital is deployed in a variety of forms. At year end, £145.6
million was held in Schroder investment products, as part of our active
programme of seeding new funds and strategies before taking them to market, and
£120.7 million was invested in a diversified, low volatility portfolio of hedge
funds, managed by NewFinance Capital. The majority of the balance was invested
in private equity (£168.2 million) and liquid assets (£311.8 million).
We continue to believe that maintaining a strong financial position is a key
competitive advantage and enables us to take a long term view in building our
business.
Dividend
In the light of the underlying growth in profit in 2006, the Board is
recommending an increased final dividend of 17.5 pence per share payable on 27
April 2007 to shareholders on the register at 16 March 2007. This brings the
total dividend for the year to 25.0 pence per share (2005: 21.5 pence per
share).
The Board's policy is to increase the dividend progressively, in line with
growth in profit.
Outlook
We have now achieved five years of significant annual increases in profit to a
level not seen since the sale of the investment banking business.
Schroders is well placed for further growth, with a broadly diversified business
by asset class, by region and by client type. However, we still need to improve
in certain areas and we will continue to focus on these and invest for the
future, most particularly in adding to our talented group of people in what is a
highly competitive marketplace, and in continuing to upgrade our information
technology and operations infrastructure.
Long term we see significant further opportunities to grow organically in
institutional, retail and high net worth channels, supplemented by complementary
acquisitions which strengthen our business.
Forward-looking statements
This preliminary announcement contains certain forward-looking statements with
respect to the financial condition, results of operations and businesses of
Schroders plc. These statements and forecasts involve risk and uncertainty
because they relate to events and depend upon circumstances that will occur in
the future. There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied by these
forward-looking statements and forecasts. The forward-looking statements and
forecasts are based on the Directors' current view and information known to them
at the date of this announcement. The Directors do not make any undertaking to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Nothing in this announcement should be
construed as a profit forecast.
Consolidated Income Statement
year ended 31 December 2006
2006 2005
£mn £mn
____________________________________________________________________________________________________________________
Revenue 967.2 808.0
Cost of sales (169.0) (131.0)
_________________________________
Gross profit 798.2 677.0
Gain on discontinued outsourcing contract - 20.4
Administrative expenses (542.3) (484.3)
_________________________________
Operating profit 255.9 213.1
----------------------------
Share of profit of associates 15.6 13.7
Share of loss of joint ventures (0.2) (0.2)
----------------------------
15.4 13.5
Interest receivable and similar income 20.1 25.3
Interest payable and similar charges (1.4) (1.2)
_________________________________
Profit before tax 290.0 250.7
----------------------------
UK tax (23.5) (16.2)
Foreign tax (44.6) (41.2)
----------------------------
Tax (68.1) (57.4)
_________________________________
Profit after tax 221.9 193.3
_________________________________
Attributable to:
Minority interests 0.6 2.0
Equity holders of the parent 221.3 191.3
_________________________________
221.9 193.3
_________________________________
Memo - dividends (63.4) (59.5)
Basic earnings per share 76.9p 65.7p
Diluted earnings per share 75.7p 65.1p
____________________________________________________________________________________________________________________
The final dividend payable for 2006 is 17.5 pence per share, amounting to a
distribution of £49.7 million
Consolidated Balance Sheet
as at 31 December 2006
2006 2005
£mn £mn
____________________________________________________________________________________________________________________
Non-current assets
Goodwill 65.3 24.6
Intangible assets 15.0 5.6
Property, plant and equipment 12.7 9.4
Associates 21.7 31.6
Joint ventures 3.6 4.1
Financial assets 198.6 123.9
Deferred tax 44.4 54.9
Trade and other receivables 420.8 303.0
______________________________
782.1 557.1
Current assets
Financial assets 1,664.0 1,795.9
Current tax 16.5 17.7
Trade and other receivables 617.0 544.9
Cash and cash equivalents 439.2 402.4
______________________________
2,736.7 2,760.9
Non-current assets held for sale 60.1 23.4
Assets backing insurance unit-linked liabilities
Investments in authorised unit trusts 1,307.4 -
Other financial assets 211.7 -
Cash and cash equivalents 12.9 -
______________________________
1,532.0 -
______________________________
Total assets 5,110.9 3,341.4
______________________________
Equity
Called up share capital 293.9 298.5
Share premium account 36.4 32.1
Other reserves 15.1 -
Capital reserves 156.3 185.5
Own shares held (90.9) (45.7)
Net exchange differences (53.7) 12.2
Retained profits 1,086.3 860.2
______________________________
Equity attributable to equity holders of the parent 1,443.4 1,342.8
Minority interests 0.2 0.3
______________________________
Total equity 1,443.6 1,343.1
Non-current liabilities
Financial liabilities - 12.0
Deferred tax 2.4 2.8
Provisions 10.8 10.1
Trade and other payables 325.2 185.3
______________________________
338.4 210.2
Current liabilities
Financial liabilities 0.3 4.2
Provisions 13.9 14.7
Current tax 31.9 32.9
Trade and other payables 1,750.8 1,736.3
______________________________
1,796.9 1,788.1
Insurance unit-linked liabilities
Liability linked to life company investments 1,532.0 -
______________________________
Total equity and liabilities 5,110.9 3,341.4
_________________________________________________________________________________________________________________
Consolidated Statement of Recognised Income and Expense
year ended 31 December 2006
2006 2005
£mn £mn
_________________________________________________________________________________________________________________
Exchange differences on translation of foreign operations (65.9) 38.6
Net gains/(losses) on hedges recognised directly in equity 32.2 (26.9)
Actuarial gains on defined benefit pension schemes 5.5 5.1
Net gains on available-for-sale investments 65.2 44.3
Tax on items taken directly to equity 6.6 6.8
______________________________
Net income and expense recognised directly in equity 43.6 67.9
Profit for the year 221.9 193.3
______________________________
Total recognised income and expense for the year 265.5 261.2
______________________________
Attributable to:
Minority interests 0.6 2.0
Equity holders of the parent 264.9 259.2
______________________________
265.5 261.2
_________________________________________________________________________________________________________________
Consolidated Cash Flow Statement
year ended 31 December 2006
2006 2005
£mn £mn
_________________________________________________________________________________________________________________
Net cash from operating activities 209.2 92.2
Investing activities
Proceeds from disposal of business - 0.2
Acquisition of subsidiaries (19.8) (0.8)
Cash acquired with acquisitions 6.8 0.8
Purchase of joint ventures - (4.2)
Purchase of intangible assets (4.6) (1.8)
Purchase of property, plant and equipment (7.1) (5.7)
Purchase of non-current financial assets (62.9) (62.4)
Purchase of non-current assets held for sale (90.1) (23.4)
Disposal of non-current assets held for sale 50.8 -
Proceeds from sale of intangible assets - 0.1
Proceeds from sale of non-current financial assets 64.1 73.9
Proceeds from sale of property, plant and equipment 0.4 0.5
Proceeds from repayment of loans by associates - 30.3
Net proceeds from sale/(purchase) of current financial assets 58.6 (68.9)
Interest received 9.0 15.7
Dividends/capital distributions received from associates and joint 23.6 9.0
ventures
______________________________
Net cash from/(used in) investing activities 28.8 (36.7)
Financing activities
Proceeds from issue of share capital 27.8 21.8
Acquisition of own shares (90.8) (23.7)
Disposal of own shares 37.3 -
Redemption of ordinary share capital (84.3) (15.3)
Distributions made to minority interests - (11.9)
Dividends paid (63.4) (59.5)
______________________________
Net cash used in financing (173.4) (88.6)
______________________________
Net increase/(decrease) in cash and cash equivalents 64.6 (33.1)
______________________________
Opening cash and cash equivalents 402.4 432.1
Net increase/(decrease) in cash and cash equivalents 64.6 (33.1)
Effect of exchange rate changes (14.9) 3.4
______________________________
Closing cash and cash equivalents 452.1 402.4
______________________________
Closing cash and cash equivalents consists of:
Cash and cash equivalents backing insurance unit-linked liabilities 12.9 -
Other cash and cash equivalents held by the Group 439.2 402.4
______________________________
452.1 402.4
_________________________________________________________________________________________________________________
Notes to the Accounts
Basis of Preparation
The preliminary results for the year ended 31 December 2006 are unaudited. The
financial information included in this statement does not constitute the Group's
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2006 will be delivered to the
Registrar of Companies in due course.
The annual report will be posted to shareholders on 16 March 2007 and further
copies will be available from the Company Secretary at the Company's registered
office. The Company's Annual General Meeting will be held on 24 April 2007 at
11.30 a.m. at 31 Gresham Street, London, EC2V 7QA.
Presentation of the Preliminary Results
Financial information for the year ended 31 December 2006 is presented in
accordance with IAS 1 Presentation of Financial Statements. IAS 1 allows an
entity to present some of its assets and liabilities using a current/non-current
classification and others in order of liquidity when this provides information
that is reliable and more relevant. The Group has adopted this mixed basis of
presentation within its consolidated balance sheet as the non-current/current
allocation is the more relevant presentation for the Group generally, whilst the
assets and liabilities of the Group's life company business are more relevantly
presented based on liquidity.
Accounting Policies
In preparing the financial information included in this statement the Group has
applied policies which are in accordance with International Financial Reporting
Standards as adopted by the European Union at 31 December 2006, and in
accordance with the IFRS accounting policies that were applied as at 31 December
2005, except for the additional policy set out below in respect of the life
company business established during 2006:
Insurance unit-linked liabilities and assets backing insurance unit-linked
liabilities
Investments in authorised unit trusts and other financial assets held within the
life company business are recognised and measured under IAS 39 which applies to
investment contracts that do not meet the insurance contract definition under
IFRS 4. Accordingly the life fund assets are carried at fair value, with gains
and losses recorded in the income statement in the year in which they arise. The
liabilities are also recorded at fair value.
Segmental Reporting
Primary reporting format - business segments
The Group has four continuing classes of business: Asset Management, Private
Banking, Private Equity and Group (formerly referred to as 'Group Net Income/
(Costs)'). Asset Management principally comprises investment management
including advisory services, property and alternative assets; Private Banking
principally comprises investment management and banking services provided to
high net worth individuals and certain smaller institutions; Private Equity
principally comprises the Group's investments in private equity, venture and
buyout funds and related vehicles; Group consists of income on the Group's
liquid and seed capital less Group costs and provisions, and the results of the
leasing business and the residual assets.
The allocation of costs to individual business segments is undertaken in order
to provide management information on the cost of providing services and to
provide managers with a tool to manage and control expenditure. Costs are
allocated on a basis that aligns the charge with the resources employed by the
Group in a particular area of its business. Typical dynamic allocation bases are
square footage occupied and number of staff employed by particular business
segments.
Non-current assets held for sale are included within the Group segment.
Year ended 31 December 2006 Asset Private Private Inter-segment
Management* Banking Equity Group elimination Total
£mn £mn £mn £mn £mn £mn
_____________________________________________________________________________________________________________________
----------------------------------------------------------------------------
External revenue 811.1 80.1 22.2 31.0 - 944.4
External net interest - 22.8 - - - 22.8
Inter-segment interest payable - (4.4) - - 4.4 -
----------------------------------------------------------------------------
Total revenue 811.1 98.5 22.2 31.0 4.4 967.2
Cost of sales (166.2) (2.8) - - - (169.0)
__________________________________________________________________________________
Gross profit 644.9 95.7 22.2 31.0 4.4 798.2
Administrative expenses (436.6) (68.8) (3.2) (33.7) - (542.3)
__________________________________________________________________________________
Operating profit 208.3 26.9 19.0 (2.7) 4.4 255.9
----------------------------------------------------------------------------
Share of profit of associates - - 15.6 - - 15.6
Share of loss of joint ventures (0.2) - - - - (0.2)
----------------------------------------------------------------------------
(0.2) - 15.6 - - 15.4
----------------------------------------------------------------------------
External interest receivable and
similar income 6.3 - - 13.8 - 20.1
Inter-segment interest
receivable 5.2 - - (0.8) (4.4) -
----------------------------------------------------------------------------
Interest receivable and similar
income 11.5 - - 13.0 (4.4) 20.1
Interest payable and similar
charges (0.6) - - (0.8) - (1.4)
__________________________________________________________________________________
Profit before tax 219.0 26.9 34.6 9.5 - 290.0
__________________________________________________________________________________
Segment assets 2,427.3** 1,942.8 170.3*** 856.1 (285.6) 5,110.9
Segment liabilities (2,013.3) (1,749.5) (2.2) (187.9) 285.6 (3,667.3)
__________________________________________________________________________________
414.0 193.3 168.1 668.2 - 1,443.6
_____________________________________________________________________________________________________________________
* Includes the Group's life company business
** Includes £3.6 million investment in joint ventures, £0.1 million investment in associates
*** Includes £21.6 million investment in associates
Inter-segment amounts represent interest payable and receivable on cash balances
held by Private Banking on behalf of Group companies.
Segmental Reporting (continued)
Year ended 31 December 2005 Asset Private Private Inter-segment
Management Banking Equity Group elimination Total
£mn £mn £mn £mn £mn £mn
_____________________________________________________________________________________________________________________
----------------------------------------------------------------------------
External revenue 667.8 58.5 28.7 31.0 - 786.0
External net interest - 22.0 - - - 22.0
Inter-segment interest payable - (6.4) - - 6.4 -
----------------------------------------------------------------------------
Total revenue 667.8 74.1 28.7 31.0 6.4 808.0
Cost of sales (128.8) (2.0) - (0.2) - (131.0)
__________________________________________________________________________________
Gross profit 539.0 72.1 28.7 30.8 6.4 677.0
Gain on discontinued outsourcing
contract 20.1 0.3 - - - 20.4
Administrative expenses (374.0) (66.1) (3.0) (41.2) - (484.3)
__________________________________________________________________________________
Operating profit 185.1 6.3 25.7 (10.4) 6.4 213.1
----------------------------------------------------------------------------
Share of profit of associates - - 13.7 - - 13.7
Share of loss of joint ventures (0.2) - - - - (0.2)
----------------------------------------------------------------------------
(0.2) - 13.7 - - 13.5
----------------------------------------------------------------------------
External interest receivable and
similar income 4.9 - 0.9 19.5 - 25.3
Inter-segment interest receivable 4.3 - - 2.1 (6.4) -
Interest receivable and similar
income 9.2 - 0.9 21.6 (6.4) 25.3
----------------------------------------------------------------------------
Interest payable and similar
charges (0.2) - - (1.0) - (1.2)
__________________________________________________________________________________
Profit before tax 193.9 6.3 40.3 10.2 - 250.7
__________________________________________________________________________________
Segment assets 647.8* 1,971.1 161.5** 777.5 (216.5) 3,341.4
Segment liabilities (369.2) (1,800.0) (0.4) (45.2) 216.5 (1,998.3)
__________________________________________________________________________________
278.6 171.1 161.1 732.3 - 1,343.1
_____________________________________________________________________________________________________________________
* Includes £4.1 million investment in joint ventures
** Includes £31.6 million investment in associates
Inter-segment amounts represent interest payable and receivable on cash balances
held by Private Banking on behalf of Group companies.
Tax Expense
2006 2005
£mn £mn
_________________________________________________________________________________________________________________
Profit before tax 290.0 250.7
Profit before tax multiplied by corporation tax at the UK standard rate of
30% (2005: 30%) 87.0 75.2
Effects of:
Impact of profits/losses arising in jurisdictions with higher tax rates 7.0 3.1
Impact of profits/losses arising in jurisdictions with lower tax rates (24.6) (22.9)
Non taxable income net of disallowable expenses (4.7) (5.5)
Movement in unrecognised deferred tax - current year 2.9 2.9
UK tax on profits of overseas entities after double taxation relief 4.0 2.7
Prior year adjustments:
UK prior year - current (6.3) (0.1)
Foreign tax prior year - current (0.8) 0.7
Deferred tax prior year 3.6 1.3
______________________________
Total tax charge for the year 68.1 57.4
_________________________________________________________________________________________________________________
Reconciliation of Net Cash from Operating Activities
2006 2005
£mn £mn
_________________________________________________________________________________________________________________
Operating profit 255.9 213.1
Adjustments for:
Depreciation and amortisation of software 7.5 10.9
Amortisation of fund management contracts 1.0 -
Impairment of available-for-sale assets recycled through the income 1.4 1.3
statement
Other amounts recycled through the income statement in respect of (24.7) (32.3)
investments
Increase in trade and other receivables (241.2) (154.2)
Increase in trade and other payables and provisions 195.1 402.1
Increase in insurance unit-linked liabilities 1,532.0 -
Net decrease in financial liabilities (15.9) (18.0)
Profit on disposal of business - (0.2)
Charge for provisions 5.8 9.4
Net gains on financial assets held at fair value through profit or loss (30.3) (24.2)
Share-based payments expensed 27.5 23.3
Other non-cash movements 42.7 (26.1)
Special payment made to UK pension scheme - (30.3)
UK corporation tax recovered/(paid) 5.1 (16.1)
Overseas tax paid (36.2) (34.7)
Interest received 10.6 11.8
Interest paid (1.4) (1.2)
Net purchase of assets backing insurance unit-linked liabilities (1,519.1) -
Net purchase of current financial assets (6.6) (242.4)
______________________________
Net cash from operating activities 209.2 92.2
_________________________________________________________________________________________________________________
Five Year Financial Summary
Prepared under IFRS Prepared under UK GAAP*
2006 2005 2004 2004 2003 2002
£mn £mn £mn £mn £mn £mn
_________________________________________________________________________________ __________________________
Profit before tax 290.0 250.7 211.6 191.0 65.0 18.9
Tax (68.1) (57.4) (40.3) (41.4) (16.4) 7.7
___________________________ __________________________
Profit after tax before minority interests 221.9 193.3 171.3 149.6 48.6 26.6
Minority interests (0.6) (2.0) (15.6) (15.6) - (0.5)
___________________________ __________________________
Profit for the year 221.3 191.3 155.7 134.0 48.6 26.1
___________________________ __________________________
Earnings per share:
Basic earnings per share (pence) 76.9 65.7 53.5 46.0 16.5 8.8
Diluted earnings per share (pence) 75.7 65.1 53.1 45.7 16.4 8.8
Dividends:
Cost (£mn) 63.4 59.5 56.4 57.8 53.7 53.3
Pence per share 22.0 20.5 19.5 20.0 18.5 18.5
Total equity (£mn) 1,443.6 1,343.1 1,130.6 1,114.1 1,029.2 1,051.9
Net assets per share (pence) 491 450 381 375 350 355
________________________________________________________________________________________________________________
* The main adjustments necessary that would make this information comply with
International Financial Reporting Standards are those concerned with the
measurement of share-based payments, dividends, leases, employee benefits,
intangible assets (including goodwill), revenue, and non-current assets
classified as being held for sale.
Funds under Management - 2006 Flows
Total Institutional Retail Private Banking
£bn £bn £bn £bn
_________________________________________________________________________________________________________________
31 December 2005 122.5 78.7 36.0 7.8
Purchase of NFC 1.4 1.4 0.0 0.0
------------------------------------------------------------
Gross sales 38.0 9.2 26.1 2.7
Gross redemptions (41.8) (17.2) (22.3) (2.3)
------------------------------------------------------------
Net assets (losses)/gains (3.8) (8.0) 3.8 0.4
Market movement 8.4 5.3 2.7 0.4
____________________________________________________________
31 December 2006 128.5 77.4 42.5 8.6
_________________________________________________________________________________________________________________
Income and Cost Metrics for the Group
2006 2005
_________________________________________________________________________________________________________________
Group cost: income ratio 65% 66%
Group cost: gross profits 68% 72%
Compensation costs: operating revenues 47% 51%
Return on average capital (pre-tax) 21% 20%
Return on average capital (post-tax) 16% 16%
Asset Management cost: gross profits 68% 69%
Asset Management gross profit on average funds under management 55bps 51bps
Asset Management costs on average funds under management 37bps 35bps
Asset Management costs on closing funds under management 36bps 33bps
_________________________________________________________________________________________________________________
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