Schroders cautious after leap

SCHRODERS cautioned today that it expects to lose more mandates in the second half after reporting better-than-expected first-half profits.

The fund management group lifted pre-tax profits from £20.5m to £27.2m, boosted by bumper profits from its private equity arm.

It stemmed the outflow of funds that has plagued it for several years, reporting a £200m net inflow of new money thanks to improved investment performance and product innovation.

That compares with outflows of £2.3bn in the corresponding period last year and £5.6bn in the first half of 2001.

However, chief executive Michael Dobson said he had deliberately included a note of caution in the outlook statement.

The group would continue to be hit by the trend of clients shifting money from balanced to specialist mandates and from more client losses in the US.

'The recovery plan is on track,' he said. 'The focus is now shifting from cost reduction to growing revenues.'

The interim dividend is held at 5.5p. Schroders has surplus cash of £703m and is on the lookout for suitable acquisitions.