Schroders 2008 profit plummets

By Raji Menon

LONDON (Reuters) - Schroders reported a sharper than expected fall in annual pretax profit on Thursday, hit by writedowns, market falls and fund outflows, and said it expected a challenging year ahead.

"We don't expect a quick recovery in the market or retail investor flows. (But) I would hope that the big outflows for the industry and for us have already taken place," chief executive Michael Dobson said.

Current market conditions and a fall in industry valuations meant Schroders could "take advantage of individual opportunities" through acquisitions with its 500 million pounds of cash balances, he said.

Schroders said 2008, when pretax profit fell 69 percent to 123.1 million pounds, was a challenging year.

"Institutional investors deferred investment commitments and retail investors withdrew money from equity funds in favour of money market funds and bank deposits," it said in a statement.

The fall in profits reflected exceptional charges of 167.4 million pounds related to realised losses and unrealised writedowns on investment capital, Schroders said.

Funds under management fell to 110.2 billion pounds at end-December from 139.1 billion pounds a year earlier.

The final dividend was unchanged at 21 pence, lifting the total dividend 3.3 percent to 31 pence.