In late February, when we ran our screen of the UK’s biggest five-year laggards, investment management firm Schroders (SDR) was one of the worst FTSE 100 performers with its shares languishing 33% below their pre-pandemic level.

Last week, the firm surprised the market not only by beating forecasts with its 2024 result but by unveiling a three-year strategic plan to return to profitable growth.

‘We are unashamed advocates of the power of active management to address our clients’ complex needs,’ said chief executive Richard Oldfield, adding: ‘Schroders is an exceptional company. We have all we need to ensure this business thrives.’

The market responded positively, sending the stock price up nearly 13%, taking year-to-date gains to more than 25% and making Schroders one of the best big-cap performers as analysts upgraded their forecasts.

‘Profits ahead of estimates for 2024 is a good starting point for a Strategy Update which does all that could be hoped for,’ said Panmure Liberum’s Rae Maile, hailing its growth aspirations, a commitment to ‘long overdue’ cost cutting and a return to ‘proper’ reporting.

‘Schroders had been in need of an investment case: the potential for 10%-plus compound annual growth in operating profit backed by continued financial strength gives it one,’ concluded Maile. 

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