The Schroders (LSE: SDR) share price bounced 4.5% in early trading Thursday (31 July) after the asset manager posted a mixed-but-quietly-encouraging set of half-year results to 30 June.

It’s been a painful decade for the family-run FTSE 100 firm, with the stock recently languishing near a 10-year low. But after drifting higher in recent weeks, helped by broader market momentum, it finally got a proper lift on the back of today’s numbers.

The headline figures looked a little underwhelming at first glance. Assets under management dipped slightly to £776.6bn, while statutory profit before tax tumbled 29% to £196.9m. But dig a little deeper and there are genuine signs of progress.

FTSE 100 recovery stock

Gross inflows rose 8% year-on-year to £68.2bn, with net new business (excluding joint ventures) of £4.5bn. Wealth Management and Schroders Capital did the heavy lifting here, with net flows of £2.7bn and £2.3bn respectively. Adjusted operating profit rose 7% to £316m, and the adjusted cost-to-income ratio improved slightly, dipping from 75% in full-year 2024 to 74% so far in 2025.

Schroders is trying hard to reshape itself. Management slashed operating expenses by £21m in the first half, with plans to save £50m over the full year, higher than before.

It’s also shedding “sub-scale businesses, such as real estate Munich and private credit Australia”, while investing in new leadership, and betting big on Schroders Capital and Wealth Management for growth. The goal is to bring the group’s cost-to-income ratio below 70% by 2027, while delivering £150m of annualised savings.

These aren’t instant wins. The transformation programme will take years and cost £200m. But they do suggest Schroders is taking a more disciplined, focused approach after years of drift.

High dividend yield

That’s exactly why I’ve been keeping a close eye on the stock. Back on 19 April, I wrote that Schroders looked “cheap, unloved and tempting”. The dividend yield was close to 7% and the bad news was largely priced in. But I also warned that it “hasn’t found a compelling modern identity… while growth looks slow and fragile”. 

Today’s trailing yield’s down to 5.32%, thanks to the recent share price jump. The stock’s up 18% over three months, but is flat over the year. With today’s interim dividend held steady at 6.5p, income seekers may not see much progression from here. But at least shareholder payouts look sustainable.

Schroders isn’t exactly cheap today, with a price-to-earnings ratio of 14.77. But it’s hardly expensive either.

I’m not expecting fireworks from Schroders in the short term. The road ahead is likely to be bumpy. Despite today’s positives, I won’t be buying the stock. Global stock markets are pretty exuberant right now, but that isn’t reflected in today’s results, which are more steady state.

I’m still not convinced Schroders can beat off the twin challenge from passive exchange traded funds and active DIY trading. But I’m pleased to see it giving it a decent shot.