Interim Results

Schroders PLC
31 August 2001

Schroders plc

Announcement of Half Year Results to 30th June 2001



  * Underlying Asset Management profit of £74.2 million (H2 2000 : £80.1
    million), down 7.4%
  * Asset Management profit, after project spend and redundancy costs, of £
    52.3 million (H2 2000: £66.1 million)
  * Profit before tax impacted by Private Equity mark-downs
  * Dividend unchanged at 5.5 pence per share
  * Funds under management £122.6 billion (31st December 2000 : £133.6 billion)
  * Continuing improvement in investment performance

Results
                      Six months ended     Six months ended    Six months ended
                        30th June 2001   31st December 2000      30th June 2000
                           (unaudited)          (unaudited)         (unaudited)

                                   £mn                  £mn                 £mn
Asset Management

     Underlying                   74.2                 80.1                93.5
     profits
                                
     Less:
     project spend              (15.0)               (14.0)              (11.0) 


redundancy costs                 (6.9)                    -                   -

Asset Management                  52.3                 66.1                82.5
profit before tax
                                 
Private Equity                   (8.5)                 18.7                50.3
                                   
Group income/                      3.2                 12.1               (1.5)
(costs)

Profit before tax,
goodwill and                      47.0                 96.9               131.3
disposal

Goodwill                         (5.5)                (4.3)               (1.8)

Sale of property
business                             -                  8.0                   -

Profit before tax                 41.5                100.6               129.5

Tax                             (10.4)               (23.5)              (32.6)

Profit after tax                  31.1                 77.1                96.9

Minority interests                 0.2                    -               (0.2)

Profit after tax                  31.3                 77.1                96.7
on continuing
operations



Commenting on the interim results, Peter Sedgwick, Chairman, said: 'Against a
background of tough market conditions, we have made substantial progress in
developing our higher growth businesses, have continued to invest in
developing our brand and have pressed ahead with many cost-saving initiatives.
Our investment performance has continued to strengthen. We are going through a
major transition but are confident that the measures we are taking are on
track to enhance our competitive position significantly.'

Contacts: Schroders
Peter Sedgwick   Chairman                               [phone]
Nick MacAndrew   Chief Financial Officer                [phone]
Julian Samways   Head of Corporate Communications       [phone]

Contact: GCI Financial
Rupert Ashe                                             [phone]



Management Statement

The underlying profits from the core Asset Management business fell by 7.4%
from the preceding half-year. In addition there was a loss in Private Equity
of £8.5 million, predominantly due to the fall in the mark-to-market valuation
of our holding in Schroder Ventures International Investment Trust plc.

Against the background of difficult stock market conditions and a further
reduction in institutional funds under management, we continued to implement
our strategy of progressively expanding our Retail and Private Banking
businesses and the radical overhaul of our support systems. This transitional
phase in the Group's development will continue through 2002 but the Board
confidently expects that the long-term benefits will significantly outweigh
the short-term impact on profits.

Profits after tax on continuing operations were £31.3 million (10.5 pence per
share), compared with £77.1 million (25.9 pence per share), in the second half
of 2000. An unchanged interim dividend of 5.5 pence per share has been
declared and will be paid on 26th October 2001 to shareholders on the register
at 21st September 2001.

Funds under Management

Funds under management at the end of June 2001 were £122.6 billion compared
with £133.6 billion at the end of December 2000:

                     30th June              31st December 2000*       30th June
                          2001                                            2000*
                           £bn                              £bn             £bn
Institutional            100.0                            111.3           123.0
Retail                    11.1                             10.8            10.4
Private Banking            7.3                              7.3             7.2
                         118.4                            129.4           140.6
Private Equity             4.2                              4.2             4.2
                         122.6                            133.6           144.8

* Restated to include advisory and custody funds of the Private Banking
business.

Structural changes in the UK institutional market and the continuing impact of
our investment performance in 1998 and 1999 caused a loss of almost £6 billion
in funds under management. The outflow was concentrated in our UK
Institutional business which at the time of our annual results in February we
forecast would continue into 2001. Lower stock markets - on average 9% below
average levels in the second half of 2000 - caused a similar reduction.

Our ability to retain existing clients and attract new clients depends
fundamentally on our investment performance and the relative improvement of
our core products achieved in 2000 has continued into the current year.

Institutional Fund Management

The improving performance trend referred to above, which extends across both
multi-asset and specialist mandates, is already having an impact on business
flows. We saw a positive overall net inflow of assets from overseas businesses
reversing the situation in the second half of 2000. In continental Europe,
which is a primary target for growth, we were delighted by our recent
appointment to a £0.8 billion mandate by Skandinaviska Enskilda Banken (SEB)
in Sweden which will be included in second half new business flows. We
continued to develop our position as a leading manager of Japanese pension
funds during the period, whilst in the key North American market strong
domestic fixed income performance is assisting our strategic goal of
broadening our product range. We were appointed to our first significant
domestic equity mandate in Australia and, in newly developing markets, our
licence in Korea was approved in the first half of the year.

In the UK, the ongoing industry trend away from balanced towards specialist
mandates will continue to put pressure on asset flows from balanced mandates,
notwithstanding the improvement in performance. Our strategy is to build
business by winning specialist pension mandates and accessing alternative
client bases.

We continued to strengthen our investment teams during the period with
significant new hires in bonds and in US and UK equities. We also restructured
the management of our fixed income business, placing our regional teams around
the world under a single head. This has enabled us to harness our resources
effectively across all our major products, reflecting the increasingly global
nature of the fixed income markets and has contributed to an improvement of
performance in this important area of our business, with £22 billion under
management.

Retail Fund Management

Our Retail business continued to expand despite weak stock markets with new
business activity being strongest in Switzerland, Scandinavia and Singapore.
Nearly 60% of our UK and Luxembourg domiciled funds now exceed their
benchmarks over a three year period which bodes well for future retail
investment flows when investor confidence returns. In the UK our market share
rose, whilst we now have a network of over 400 distributors with approximately
30,000 points of sale in continental Europe. Through distribution partnerships
with insurance groups and the launch of capital protection funds we became the
second largest mutual fund manager in Singapore and Hong Kong during the
period.

In line with the Institutional business, the Retail division is placing
increasing focus on the central aspects of added value: fund management,
sales, marketing and product design. As part of the strategy of targeting
resources we are streamlining our operational platforms, including the closure
of our retail operations in South Africa and Argentina, and rationalising the
product range to ensure sufficient scale and efficiency in key target markets.
In Asia we have decided to consolidate our operational functions on to a
single platform in Singapore, which will improve the efficiency and
scaleability of our business in the region. It is also our intention to
outsource the administration of our UK retail funds which will ensure a
competitive operational cost base which can respond to margin pressure within
the UK retail fund industry.

During the period we also announced a strategic partnership with China Galaxy
Securities Company to further the development of its fund management
activities in mainland China. Our aim is to co-operate in the establishment of
a joint venture fund management company in due course, following China's
accession to the World Trade Organisation.

Finally, Schroder Pensions, our defined contribution company in the UK, won
mandates from 30 clients and we were the first asset management company to
gain regulatory approval for our stakeholder product.

Private Banking

A Chief Executive of our Private Banking operation was appointed in April 2001
and a medium term growth strategy has been agreed. We will capitalise on our
Group strengths to become the private bank of choice for our target client
base of high net worth families and individuals. We will position ourselves
where we perceive a noticeable opportunity clearly above the highly
competitive 'mass affluent' segment. Significant investment will be made in
the next two years in developing our private banking systems, broadening our
product capabilities, new marketing initiatives and selective recruitment
internationally. As a result, Schroder Private Banking expects to become an
important contributor to the Group.

The period saw a significant expansion of our presence in Germany with the
opening of a new branch in Frankfurt. New offices in Paris and Padua
complement our existing offices in Zurich, Geneva, Milan, Rome and Madrid. We
have steadily expanded our product range, particularly in the field of
alternative investments which are becoming increasingly attractive in the
management of private client portfolios.

Despite difficult market conditions, Private Banking continued to expand
existing client relationships and win new business across a range of products
with a net inflow of £400 million during the period.

Private Equity and Alternative Investments

The depressed stock market conditions had a particularly severe effect on our
private equity interests. The mark-to-market valuation of our 12.8% holding in
Schroder Ventures International Investment Trust plc led to an unrealised loss
in the period of £10.6 million, offset to a small degree by net gains from our
share of the carried interests and direct and indirect co-investments in funds
managed or advised by Schroder Ventures. We announced in March that our
relationship with Schroder Ventures was being restructured and that, from the
end of June 2002, any carried interests on new funds would be agreed on a
fund-by-fund basis. We have investments and commitments exceeding £160 million
directly and indirectly in their funds and expect to realise significant
profits from these over the next few years. We also plan to launch a private
equity fund of funds for institutional and private clients.

During the first half of last year we established Internet Finance Partners to
invest in technology-based wholesale financial services businesses. We
currently have five investments with a combined book value of £12.1 million
and do not currently plan to make any new investments.

With regard to alternative investments, we have broadened our product range,
continuing to move to those which deliver higher margins. We have created four
new hedge funds, issued a series of capital protected funds in Hong Kong and
Singapore and plan further launches in Japan and the UK.

Total property funds under management were just over £2.5 billion as at June
2001 with £1.2 billion managed by four specialist offshore property unit
trusts. Since 30th June, two further specialist offshore property unit trusts,
the City of London Office Unit Trust and the newly created West End of London
Property Unit Trust, have taken on the management of £850 million of property
funds.

Income and Costs

Despite the 8% drop in average funds under management compared with the second
half of 2000, income from Asset Management fell by less than 5% to £267
million. The average margin increased to 42 basis points, reflecting a higher
proportion of specialist mandates and retail and private banking funds;
revenues from Retail increased and gross revenues from Private Banking were
consistent with the second half of 2000. Gross margins in these areas are more
attractive than in the mature institutional market in the UK and with regard
to Retail we are looking to sell directly or develop third party distribution
channels. Our efforts are being focused particularly in Europe where we
believe there is significant near-term potential but we also have strong
marketing teams in Asia Pacific and, for the Institutional business, in the
United States. Revenue enhancement remains a priority.

The rate of increase in costs has slowed significantly, partly because the
much increased development expenditure in our Retail business began to level
off, but also because we took a number of steps to reduce our cost base in
response to stock market conditions. Our underlying staff numbers were static
with a reduction in Institutional numbers being offset by continued investment
in Retail and Private Banking.

Consistent with our decision to invest through the cycle and to concentrate
our resources on investment performance, client service and brand promotion,
we maintained our programme to replace legacy systems and to outsource
selected business support areas. In particular, we announced in June that we
had entered into a seven-year information technology outsourcing contract in
London with Computer Sciences Corporation (CSC) and the project to outsource
our UK custody and fund administration services to JP Morgan is on track for
completion in the first quarter of 2003. The cost of these and other
exceptional projects such as new front-end dealing systems was £15 million
during the period. The rate of project spend will continue at a high level in
the second half but should reduce during late 2002 and once completed will
introduce more flexibility into our cost base.

The leasing results are now shown in Group income/(costs) and, accordingly,
the Asset Management profit before tax for the second six months ended 31st
December 2000 has been reclassified from £74.1 million to £66.1 million. There
is no effect on the results for the first six months ended 30th June 2000.

Capital

Our financial position remains very strong with approximately £1.2 billion of
capital and reserves. About £500 million is utilised by the asset management
business of which almost one-fifth has been used to seed or facilitate the
development of new products. The balance of our capital is either invested in
private equity as described above, is available (to the tune of £200 million)
to support our leasing business or is invested in high quality, short-term
debt instruments. The Board continues to keep the amount of available capital
under review.

Board Changes

We have separately announced today that David Salisbury has decided to resign
as Chief Executive and from the Group. Peter Sedgwick will assume the Chief
Executive's responsibilities until a new Chief Executive is appointed. We have
also announced at the same time the appointments to the Board of John Troiano
and Massimo Tosato, heads of our Institutional and Retail businesses
respectively.

Outlook

In the near term there may be a continuation of the difficult environment for
equity markets. Falling profits in many major industries around the world are
depressing share prices and consequently returns from equity investment. More
positively, companies in the Americas and Europe are taking vigorous steps to
reduce their operating costs and sustain profitability; this, combined with
lower interest rates, should lead to improving markets.

We are now well into our planned programme of investment in efficiency
improvements, upgraded systems and business development. Your Board has great
confidence in the long-term prospects for the asset management industry in
general and, in particular, for Schroders, with our brand, people and
independence.





Peter Sedgwick

Chairman

31st August 2001





Consolidated Profit and Loss Account (unaudited)


               Six         Six months ended              Six months ended
             months
              ended       31st December 2000              30th June 2000
              30th
              June
              2001
              Total  Continuing Discontinued Total Continuing Discontinued Total
                     operations  operations        operations  operations
               £mn       £mn         £mn      £mn       £mn         £mn     £mn



Revenues       275.8      313.8            -   313.8    323.5       254.9  578.4

Investment    (10.6)        2.5            -     2.5     17.3           -   17.3
(loss)/gain
             
Operating    (224.3)    (211.2)            - (211.2)  (215.7)     (217.0)(432.7)
expenses      

Depreciation  (18.3)     (29.9)            -  (29.9)   (15.2)       (3.6) (18.8)
and
amortisation

Operating       22.6       75.2            -    75.2    109.9        34.3  144.2
profit

Profit on          -          -          6.8     6.8        -         4.1    4.1
sale of the        
investment
banking
business

Profit on          -        8.0            -     8.0        -           -      -
sale of            
property         
business         

Income from      1.3      (0.4)            -   (0.4)     10.2           -   10.2
shares in
associated
undertakings

Interest        18.3       18.4            -    18.4     10.0           -   10.0
receivable
and similar
income

Interest       (0.7)      (0.6)            -   (0.6)    (0.6)           -  (0.6)
payable and
similar
charges

Profit on       41.5      100.6          6.8   107.4    129.5        38.4  167.9
ordinary
activities    
before tax

Tax on        (10.4)     (23.5)        (8.5)  (32.0)   (32.6)        10.8 (21.8)
profit on
ordinary
activities

Profit on       31.1       77.1        (1.7)    75.4     96.9        49.2  146.1
ordinary
activities
after tax

Minority         0.2          -            -       -    (0.2)           -  (0.2)
interests

Profit          31.3       77.1        (1.7)    75.4     96.7        49.2  145.9
attributable
to            
shareholders

Dividend      (16.3)     (37.8)            -  (37.8)   (16.3)           - (16.3)

Retained        15.0       39.3        (1.7)    37.6     80.4        49.2  129.6
profit

Basic          10.5p      25.9p                25.3p    32.7p              49.3p
earnings per
share

Diluted        10.4p      25.7p                25.0p    32.6p              49.2p
earnings per
share

Dividend per    5.5p                           13.0p                        5.5p
share



The consolidated profit and loss account adheres to the standard format
required by Schedule 4 to the Companies Act 1985. Consequently, the results
for the year 2000 have been reclassified to comply with the new format.



Consolidated Balance Sheet
                                                 30th June 2001   31st December
                                                                           2000
                                                    (unaudited)       (audited)
                                                    £mn     £mn     £mn     £mn
Fixed assets

Intangible assets - goodwill                               37.1            41.8

Tangible assets                                           119.8            94.1

Investments                                               334.2           303.2

Insurance assets attributable to unit linked            3,155.0         3,119.2
policyholders

                                                        3,646.1         3,558.3

Current assets

Debtors due within one year                       830.3           720.6

Debtors due after more than one year              171.8           279.2

Investments                                       424.5           241.8

Cash and balances with banks                      951.8         1,152.0

                                                2,378.4         2,393.6
Creditors - amounts falling due 
within one year                               (1,589.9)       (1,587.8)

Net current assets                                        788.5           805.8

Total assets less current liabilities                   4,434.6         4,364.1

Creditors - amounts due after more than one
year                                                     (56.4)          (33.0)

Insurance liabilities attributable to unit
linked policyholders                                  (3,155.0)       (3,119.2)

Provisions for liabilities and charges                   (33.6)          (50.3)


                                                         

Net assets                                              1,189.6         1,161.6

Capital and reserves

Called up share capital                                   296.9           296.9

Share premium account                                       1.3             1.3

Reserves                                                  891.0           863.0
Equity shareholders' funds                              1,189.2         1,161.2

Minority interests                                          0.4             0.4
Total shareholders' funds including minority            1,189.6         1,161.6
interests






Consolidated Cash Flow Statement          Six months            Year ended 31st
(unaudited)                                    ended              December 2000
                                           30th June
                                                2001                        
                                                 £mn                        £mn
Net cash inflow/(outflow) from                  96.6                    (614.3)
operating activities
Dividends received from associates                 -                        0.1
Return on investments and                       18.1                       24.7
servicing of finance
Taxation                                      (11.6)                     (62.4)
Capital expenditure and financial             (80.1)                      845.1
investments
Acquisitions and disposals                         -                      353.0
Equity dividends paid                         (37.8)                     (54.3)
Management of liquid resources                (97.6)                     (35.8)
Net cash outflow from financing                    -                    (150.7)
(Decrease)/increase in cash                  (112.4)                      305.4






Reconciliation of Movement in Cash        At 30th June    Cash   At 1st January
                                                  2001    flow             2001
                                                   £mn     £mn              £mn
Cash and balances with banks repayable           586.9 (112.4)            699.3
on demand




Reconciliation of Operating Profit to            Six months          Year ended
Net Cash Inflow/(Outflow) from                   ended 30th       31st December
Operating Activities                              June 2001                2000
                                                        £mn                 £mn
Operating profit                                       22.6               219.4

Depreciation of tangible assets and                    18.3                48.7
amortisation of goodwill
Other non-cash movements                                9.0              (19.5)
Changes in working capital                             46.7             (862.9)
Net cash inflow/(outflow) from                         96.6             (614.3)
operating activities










Statement of Total Consolidated Recognised Gains and Losses           30th June
(unaudited)                                                                2001
                                                                            £mn
Profit for the period                                                      31.3

Exchange translation adjustments to foreign currency net                   13.0
investment
Total recognised gains and losses                                          44.3










Reconciliation of Movements in Consolidated Shareholders'             30th June
Funds (unaudited)                                                          2001
                                                                            £mn
Profit for the period                                                      31.3

Dividend                                                                 (16.3)
                                                                           15.0

Exchange translation adjustments                                           13.0
Net increase in shareholders' funds                                        28.0

At 1st January 2001                                                     1,161.2
At 30th June 2001                                                       1,189.2



The interim financial information has been prepared on the basis of the
accounting policies set out in the Group's 2000 Annual Report & Accounts.

The accounts are non-statutory and have not been audited. The financial
information for the year ended 31st December 2000 is extracted from the
Group's latest published accounts and does not constitute the statutory
accounts for that year. Those accounts received an unqualified audit report
and have been delivered to the Registrar of Companies.

The interim report will be posted to shareholders within the next week.
Further copies of this statement are available from the Company Secretary at
31 Gresham Street, London EC2V 7QA, telephone [phone] and on the
Company's website at www.schroders.com.