Schroders Regulatory News (SDR)

Schroders plc

¹Please refer to Additional Information for more information about client investment performance.

Peter Harrison, Group Chief Executive, said:

"The market challenges of 2022 provided a stress test for our strategy. I am encouraged by our resilient performance and that our strategy is working. The businesses we have been building in recent years - across wealth management, private assets and solutions - performed strongly. They are all playing an increasingly important part in our growth and now represent 53% of the Group's AUM.

Schroders Capital, our private assets business, had a record year with £17.5 billion of fundraising, with particular strength in real estate and private equity. Despite the market dynamics, our wealth management advice businesses had a good year, delivering strong organic growth of 6.6%, while we also continued to build scale in Schroders Solutions.

Our strength more broadly is underpinned by our approach to sustainability. We were early investors in ESG and the technology that underpins our capabilities in this area. This has proven to be the right decision and we will continue to invest in 2023 and beyond.

2023 has started positively, particularly in Schroders Solutions. We are confident about our trajectory: our clients require broad, actively-managed solutions and we have built the capability to meet that need."

Management statement

Our successful pivot towards higher growth areas meant our revenues were more resilient during what was a challenging year for our industry. As a result, our financial performance was robust as it benefitted from strong growth generated in Schroders Wealth Management and Schroders Capital.

We hit multiple key milestones in sustainability in 2022. We are the largest investment manager by AUM to have its greenhouse gas emission reduction goal formally validated by the Science Based Targets initiative (SBTi). Our award-winning Engagement Blueprint was published at the start of the year to reinforce further our firmwide active ownership ambitions going forward. We're also proud to have topped the list of financial institutions in this year's Global Canopy Forest 500 report, a ranking of companies and global financial institutions deemed "powerbrokers of zero deforestation" and to be placed 5th in ShareAction's 2023 report ranking 77 asset managers on their approach to responsible investment.

We made progress on our governance ambitions this year as we successfully completed the enfranchisement of our non-voting shares in September 2022, we now have only one share class, and we have equal gender representation on our plc Board. Dame Elizabeth Corley became Chair of the plc Board in April 2022.

Financial performance

2022 was a challenging year for markets, which inevitably affected our revenues. Despite this backdrop, our net operating revenues excluding performance fees and net carried interest increased by 1%, demonstrating the strength of our business and the success of our strategy. Our Wealth Management segment performed particularly strongly with net operating revenues up 10%, reaching £394.3 million (2021: £360.0 million). Despite the high-water marks set in 2021, we generated better than expected performance fees of £43.0 million (2021: £94.4 million) and net carried interest of £16.5 million (2021: £31.9 million). Overall net operating income remained stable at £2,475.5 million (2021: £2,520.0 million). This includes our share of profit from our joint ventures and associates of £77.6 million (2021: £88.2 million).

Operating expenses were £1,752.5 million (2021: £1,679.0 million) across the Asset and Wealth Management segments. The increase reflects the additional operating costs of the three strategic acquisitions which also contributed to an increase in headcount this year. However, we were able to manage compensation costs well and operating staff costs were lower than the previous year at £1,121.2 million (2021: £1,136.3 million).

Operating non-compensation costs increased to £631.3 million (2021: £542.7 million) as we continued to invest in our business. This was principally driven by the acquisitions we made in 2022 and the organic build out of our businesses in high growth markets. We also accelerated our cloud migration programme, which we now expect to deliver cost savings earlier than anticipated. Travel and marketing expenditure normalised post-pandemic as we increasingly met clients in-person. The underlying effect of inflation on our cost base was only 2.5%, as a result of our focus on cost efficiencies. This meant an operating cost to net operating income ratio of 71% (2021: 67%) and an operating compensation to net operating income ratio of 45% (2021: 45%).

These movements meant that operating profit reduced to £723.0 million (2021: £841.0 million). Profit before tax was £586.9 million (2021: £764.1 million) and profit after tax was £486.2 million (2021: £623.8 million) as they were further impacted by mark-to-market movements on balance sheet items and acquisition related costs including amortisation.

AUM ended the year 4% lower at £737.5 billion (2021: £766.7 billion). Market and foreign exchange movements reduced AUM by £73.6 billion, while acquisitions contributed £52.0 billion. After a strong first half, volatility in the fourth quarter led to net outflows for the year of £7.6 billion (2021: inflows of £37.3 billion) including associates and joint ventures.

Providing excellent investment performance to our clients through active management is what drives our financial performance. Our KPI held up well, with 73% (2021: 79%) of assets outperforming their relevant comparator over three years. 86% of our public market AUM had a better SustainEx™ score than their benchmark (2021: 77%).

²Wealth Management AUM has been restated to reflect the basis on which contractual revenues are earned by the Group. As reported at the half-year results, AUM is now recognised where separate contractual client relationships exist that generate incremental revenues for the Group.

³Includes currency movements which increased AUM by around £37.3 billion.

The Board has recommended a final dividend of 15.0 pence (2021 final restated dividend: 14.9 pence⁴). This will bring the total dividend for the year to 21.5 pence (2021 total restated dividend: 21.4 pence⁴), representing a payout ratio of 57% of operating earnings per share. The final dividend will be paid on 4 May 2023 to shareholders on the register on 24 March 2023.

⁴Dividends per share have been restated following the simplification of the Company's dual share class structure (see note 13).

Strategic progress

We successfully pivoted towards higher growth areas and higher longevity, primarily through Schroders Wealth Management, Schroders Capital and Schroders Solutions. One key priority is to get closer to the consumer to avoid disintermediation and increase client longevity.

We are achieving this by growing Schroders Wealth Management through:

We have been expanding Schroders Capital, our private assets and alternatives brand. We now have a complete private markets capability offering across all four private markets asset classes: private equity, private debt, infrastructure and real estate. We will increase its operational leverage by:

We have established Schroders Solutions, a market-leading offering. We will grow our market share by:

Schroders Investment Management, our public markets business, also offers growth opportunities. We are aiming to grow this business through:

The combination of these efforts effectively pivots our business towards higher margin, higher growth and higher longevity areas, which will lead to higher and more resilient earnings over the medium term. Our growth has become self-reinforcing as the ability to serve clients in one area enhances our ability to serve clients in other areas.

The merits of our strategic choices and diversification were demonstrated in 2022. Although our Schroders Investment Management business, including Asset Management associates, came under pressure with the fall of public markets, Schroders Wealth Management and Schroders Capital performed well, delivering £12.0 billion of NNB combined (2021: £13.0 billion). Schroders Solutions successfully navigated the gilt crisis and ended the year broadly flat with net outflows of £0.2 billion (2021: net outflows of £1.5 billion).

Across our strategic growth areas of Schroders Wealth Management, Schroders Capital and Schroders Solutions, AUM rose 4% from £374.4 billion in 2021 to £389.9 billion in 2022. These businesses now represent 53% of our total business compared to 49% in the previous year.

Wealth Management segment

Our wealth management business saw particularly strong growth, with our advice businesses generating organic growth of 6.6%, and exceeding the target for the year. Our high-net-worth (HNW), ultra-high-net-worth (UHNW) and charities businesses and specifically our Cazenove Capital advised business in the UK were key factors behind this, generating strong organic NNB growth of 8%, a confirmation of the success of our strategy. The principal drivers were: the successful build-out of Cazenove's business-owner franchise across the UK regions where we attracted talented advisers in Birmingham, Leeds, Bristol and Manchester; strong investment performance in volatile markets, which continued to reduce attrition and led existing clients to add to their portfolios and refer new clients; and Cazenove Capital's leading reputation in sustainable investment which attracted new UHNW clients, family offices and charity clients. Since winning the "ESG Olympics", a public tender showcasing the specialist expertise of 59 wealth managers, Cazenove Capital has seen flows from sustainable mandates grow significantly, representing gross flows of circa. 80% for our charity business this year. Benchmark Capital also performed well and generated NNB of over 6% in 2022 and increased the number of adviser firms by 16 to 171. Schroders Personal Wealth, our partnership with Lloyds Banking Group, also generated encouraging gross new business of 9%. We will hold an investor session focusing on Schroders Wealth Management on 13 June 2023.

Net operating income increased by 6% to £406.8 million (2021: £382.5 million). This was supported by the higher interest rate environment which led to a rise in net banking interest, increasing from £11.1 million in 2021 to £36.9 million in 2022. AUM closed the period slightly lower at £98.1 billion (2021: £101.6 billion), due to the impact of market movements. This comprised £60.4 billion (2021: £61.4 billion) of advised AUM, £17.3 billion (2021: £18.7 billion) of platform AUM and £20.4 billion (2021: £21.5 billion) of managed AUM. Schroders Personal Wealth AUM ended the year at £13.3 billion (2021: £14.7 billion).

Operating expenses came in at £276.9 million (2021: £254.2 million) as a result of our continued investment in our people and technology platforms. The segment therefore ended the year generating £129.9 million (2021: £128.3 million) of operating profit. The net operating revenue margin before performance fees increased by 2 basis points to 40 basis points (2021: 38 basis points), largely due to changes in the interest rate environment during the year.

Asset Management segment

Over the past six years we have built a comprehensive private assets business, Schroders Capital, through a targeted program of bolt-on acquisitions. In total, we have acquired £24.6 billion of private markets AUM since 2016 which we have almost doubled to £47.4 billion. Our acquisition of Adveq in 2017 is a good example of how we have successfully grown a new capability. We acquired a high quality business, which was led by an impressive management team but needed access to a strong brand, an effective product development machine and a global distribution network founded on strong, deep client relationships. It managed £6.0 billion at the time of acquisition, but by leveraging our global reach we have grown the AUM by 90%. Today, the capability known as Schroders Capital Private Equity manages £11.4 billion. This included winning some sizeable private equity mandates across Europe last year.

In 2022, we further strengthened Schroders Capital and completed the acquisition of a 75% stake of Greencoat Capital, a leading European renewable infrastructure manager, and Cairn Real Estate in the Netherlands. The two transactions added a combined £8.8 billion of AUM. Schroders Capital now has a full private market offering and our focus will turn to increasing the operational leverage of the business over the next few years, increasing its NNB and revenue contribution.

Fee earning AUM increased by 32% during 2022 to £68.3 billion (2021: £51.7 billion), whilst AUM plus non-fee earning dry powder increased from £54.2 billion in 2021 to £72.3 billion. Non-fee earning dry powder stood at £4.0 billion (2021: £2.5 billion) at the end of 2022. This was supported by fundraising of £17.5 billion (2021: £12.4 billion). Strong fundraising throughout the year meant Schroders Capital generated NNB of £6.4 billion (2021: £6.9 billion), with strong demand for our real estate capability which saw net inflows of £5.0 billion. The revenue margin excluding performance fees and carried interest reduced by 1 basis point to 61 basis points (2021: 62 basis points) as we transferred our emerging market debt desk to our Institutional business area in order to better align with our management structures.

Schroders Solutions benefitted from acquiring River & Mercantile's Solutions business at the beginning of 2022. The enhanced capabilities of Schroders Solutions enabled two sizable mandate wins in the first half. In the third quarter, the segment was inevitably impacted by the gilt crisis. Despite only having acquired River & Mercantile's Solutions business at the start of the year, we navigated the crisis well and delivered the liquidity our clients needed to meet their collateral calls. In total, NNB was broadly flat at £(0.2) billion (2021: £(1.5) billion). The interest rate rises contributed to a reduction in the value of our AUM. However, this generally benefitted our LDI clients as the value of their liabilities reduced, helping them move closer to their objective of achieving a buyout.

Solutions AUM rose by 2%, ending the year at £210.2 billion (2021: £206.4 billion), driven by the acquisition of River & Mercantile's Solutions business, which added £43.1 billion of AUM. Net operating revenue increased by 6% year-on-year to £292.2 million (2021: £276.4 million). Schroders Solutions now represents 29% of our Group AUM and 12% of net operating revenue. Solutions net operating revenue margin excluding performance fees fell by 1 basis point to 13 basis points (2021: 14 basis points), reflecting a shift towards bigger, more scalable mandates.

Schroders Investment Management, our public markets business, continued to invest in the development of our product offering.

We have enjoyed a successful history of partnerships which has provided us with access to high growth markets via a strong domestic brand. This is the case in North America, where we have partnered with Hartford Funds to access the vast US intermediary market. The Hartford Schroders International Stock Fund saw the highest net flows of any product within Mutual Funds in 2022 and led to the Hartford Schroders range delivering £750 million of NNB. The range closed the year at nearly £11 billion of AUM. In total, this partnership has contributed £5.8 billion of NNB over the last five years and grown its AUM at a compound annual growth rate of 19%.

Despite these successes, our Mutual Funds business area saw net outflows of £5.9 billion (2021: net inflows of £8.1 billion) as it was impacted by risk-off client sentiment across most regions. AUM in Mutual Funds was £100.8 billion (2021: £116.9 billion). Mutual Fund revenue margin dropped by 1 basis point to 71 basis points (2021: 72 basis points), due to a change in business mix as the adverse market conditions had a greater impact on our higher margin products.

Institutional generated positive NNB of £0.3 billion in the second half of 2022, which was helped by our WMC (Wealth Management Company) in China, which generated positive NNB of £2.3 billion. However, this was offset by two one-off mandate losses in the first half of the year, leading to net outflows of £7.3 billion (2021: £2.5 billion of net outflows). AUM closed the year at £139.1 billion (2021: £159.0 billion), reflecting the impact of the market decline in the year. The business area generated £520.5 million (2021: £601.0 million) of net operating revenue. The net operating revenue margin excluding performance fees and carried interest increased by 3 basis points from 31 basis points last year to 34 basis points at the end of 2022, helping to partly mitigate the impact of the broader headwinds.

Our Asset Management associates have delivered cumulative NNB of over £35 billion over the past four years. Being a cyclical high-growth business, our Fund Management Company venture in China with Bank of Communications was impacted by the fixed income dislocation towards the tail-end of 2022. As a result, Asset Management associates ended the year with net outflows of £6.2 billion (2021: net inflows of £20.2 billion).

Across the Group, our purpose is to deliver excellent investment performance. We do this whilst also focussing on delivering exceptional client service and offering distinctive solutions that help us to increase client longevity and differentiate us from the rest of the market. This is a key driver of future organic growth. Excluding joint ventures and associates, our gross outflow rate as a percentage of opening AUM was 20% in 2022, compared to 25% when we set our strategy six years ago. In real terms, this means that instead of replacing the entirety of our client base every four years, this is extended to every five years, improving our ability to generate long term growth and more resilient earnings due to higher longevity.

Outlook

Forecasts for markets and the global economy in 2023 remain mixed. Our strategy is working, and we firmly believe that current industry dynamics will only accelerate the trends that we have been repositioning the business for. Our strategic growth areas of Schroders Wealth Management, Schroders Capital and Schroders Solutions are an increasingly important part of our future success. Our continued efforts have been rewarded and 2023 has started positively, particularly in Schroders Solutions. In addition, we believe that leadership in sustainability will be a critical success factor going forward.

We are confident in the businesses we have built for the long term. In uncertain times, our diverse business model enables us to focus on the long term interests of our clients and shareholders.

For further information, please contact:

Copies of this announcement are available on the Schroders website: www.schroders.com. Peter Harrison, Group Chief Executive, and Richard Keers, Chief Financial Officer, are hosting a presentation for the investment community to discuss the Group's full-year results at 9.00 a.m. GMT on Thursday, 2 March 2023. Once registered on https://www.schroders.events/Annualresults2022 a link to the call will be shared via email. A replay will be available from midday on Thursday, 2 March 2023 at www.schroders.com/ir.

Please visit https://www.schroders.com/en/investor-relations/ to learn how we handle personal data.

Forward-looking statements

This announcement and the Schroders website may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are based on current expectations and assumptions but relate to events and depend upon circumstances in the future and you should not place reliance on them. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'sees', 'believes', 'expects', 'aims', 'confident', 'will have', 'will be', 'will ensure', 'likely', 'estimates', 'foresee' or 'anticipates' or the negative of these terms or other similar terms are intended to identify such forward-looking statements. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this statement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this announcement or in the Annual Report and Accounts or on the Schroders website should be construed as a forecast, estimate or projection of future financial performance.

Additional information

Simplifying our share structure

In September, we completed the simplification of our share structure by enfranchising our non-voting shares. Now all shareholders have the same rights. Under the enfranchisement each non-voting share was converted into an ordinary share and the existing holders of ordinary shares received a bonus issue of three additional ordinary shares for every 17 ordinary shares to compensate them for the dilution of their voting rights. Subsequent to the enfranchisement and bonus issue, the ordinary shares were sub-divided into five new ordinary shares.

Client investment performance

Client investment performance is a measure of how investments are performing relative to a benchmark or other comparator. As an active asset manager, we prioritise consistently delivering positive investment outcomes for our clients which is why our three year investment performance is a key performance indicator for the Group. It is calculated internally by Schroders to give shareholders and financial analysts general guidance on how our invested assets are performing. The data is aggregated and is intended to provide information for comparison to prior reporting periods only. It is not intended for clients or potential clients investing in our products. All calculations for investment performance are made gross of fees with the exception of those for which the stated comparator is a net of fees competitor ranking. When a product's investment performance is disclosed in product or client documentation it is specific to the strategy or product. Performance will either be shown net of fees at the relevant fund share-class level or it will be shown gross of fees with a fee schedule for the strategy supplied.

The calculation includes virtually all applicable assets under management that have a complete track record over the one-year, three-year and five-year reporting periods, respectively.

Applicable assets under management does not include our joint ventures and associates and excludes £79.3 billion of assets, principally comprising those managed by third parties or held on an execution-only basis, assets managed by Schroders Capital Real Estate Hotels, non-discretionary assets and assets held on a custody-only basis as well as Wealth Management platform assets on the Benchmark Fusion platform. Performance is calculated relative to the relevant comparator for each investment strategy as summarised below. These fall into one of four categories, the percentages for each of which refer to the three-year calculation:

Consolidated income statement

for the year ended 31 December 2022

¹The 2021 comparatives have been re-presented (see note 1).

²Non-controlling interest is presented in the statement of changes in equity.

³Earnings per share has been restated following the simplification of the Company's dual share class structure (see note 13).

Consolidated statement of comprehensive income

for the year ended 31 December 2022

¹Non-controlling interest is presented in the statement of changes in equity.

Consolidated statement of financial position

at 31 December 2022

¹Non-controlling interest is presented in the statement of changes in equity.

Consolidated statement of changes in equity

for the year ended 31 December 2022

¹Other comprehensive income reported in the net exchange differences reserve comprises the net foreign exchange gain on the translation of foreign operations net of hedging. Other comprehensive income reported in the associates and joint ventures reserve represents post-tax fair value movements on financial assets at fair value through other comprehensive income. Other comprehensive income reported in the profit and loss reserve comprises the post-tax actuarial loss on the Group's retirement benefit schemes and post-tax fair value movements on financial assets at fair value through other comprehensive income.

²Other movements principally comprises amounts relating to financial liabilities in respect of options to purchase the remaining non-controlling interest in certain subsidiaries (see note 7).

for the year ended 31 December 2021

¹Other comprehensive income reported in the net exchange differences reserve comprises the net foreign exchange loss on the translation of foreign operations net of hedging. Other comprehensive income reported in the associates and joint ventures reserve represents post-tax fair value movements on financial assets at fair value through other comprehensive income. Other comprehensive income reported in the profit and loss reserve comprises the post-tax actuarial gain on the Group's retirement benefit scheme surplus and post-tax fair value movements on financial assets at fair value through other comprehensive income.

²Other movements include amounts relating to the purchase of additional interests in subsidiaries.

Consolidated cash flow statement

for the year ended 31 December 2022

¹Includes Wealth Management interest income received of £75.3 million (2021: £11.3 million) and interest paid of £38.4 million (2021: £0.2 million).

Explanatory notes to the financial statements

1. Presentation of the financial statements

(a) Basis of preparation

The financial information included in this statement does not constitute the Group's statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for 2021 have been delivered to the Registrar of Companies and the auditor's opinion on those accounts was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Act. An unqualified auditor's opinion has also been issued on the statutory accounts for the year ended 31 December 2022, which will be delivered to the Registrar of Companies in due course.

The consolidated financial statements are prepared in accordance with UK-adopted international accounting standards and in conformity with the requirements of the Companies Act 2006.

(b) Future accounting developments

The Group did not implement the requirements of any other Standards or Interpretations that were in issue but were not required to be adopted by the Group at the year end date. No other Standards or Interpretations have been issued that are expected to have a material impact on the consolidated financial statements.

(c) Going concern

The Group has considerable financial resources, a broad range of products and a geographically diversified business. As a consequence, the Directors believe that the Group is well placed to manage its business risks in the context of the current economic outlook. Accordingly, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for twelve months from the date the Annual Report and Accounts are approved. They therefore continue to adopt the going concern basis in preparing the Annual Report and Accounts.

(d) Presentational changes

The consolidated income statement has been re-presented to show both operating profit generated from the Group's business segments and profit before tax. The new presentation provides information that is more relevant to understanding the performance of the Group's operating activities. It also provides greater prominence to items of income and expense that are managed outside of the business segments, see note 3. The segmental reporting note has also been re-presented, see note 2. A reconciliation of operating profit to profit before tax and exceptional items is provided below.

Reconciliation of operating profit to profit before tax and exceptional items

2. Segmental reporting

(a) Operating segments

The Group has two operating segments: Asset Management and Wealth Management. The Asset Management segment principally comprises investment management including advisory services in respect of equity, fixed income, multi-asset and private assets and alternatives products. The Wealth Management segment principally comprises investment management, wealth planning and financial advice, platform services and banking services.

Segmental information is presented on the same basis as that provided for internal reporting purposes to the Group's chief operating decision maker, the Group Chief Executive. The segmental reporting note has been re-presented to reflect the changes made to the income statement (see note 1) and to present the results of Schroders Personal Wealth (SPW) within share of profit of associates and joint ventures using the equity accounting method. The results of SPW were previously consolidated on a proportional basis within the Wealth Management segment for the purpose of segmental reporting. This new presentation reflects changes to the basis on which the Group monitors the performance of the business.

Operating expenses represent the costs incurred in running the Asset Management and Wealth Management segments and include an allocation of costs between the individual business segments on a basis that aligns the charge with the resources employed by the Group in respect of particular business functions. This allocation provides management with the relevant information as to the business performance to effectively manage and control expenditure. Operating expenses exclude items related to acquisitions and central management activities (see note 3). The reconciliation of operating profit to profit before tax is available on the income statement.

¹The 2021 comparatives have been re-presented (see note 1).

(b) Net operating revenue by segment is presented below:

¹The 2021 comparatives have been re-presented (see note 1).

(c) Net operating revenue by region is presented below based on the location of clients:

¹The 2021 comparatives have been re-presented (see note 1).

3. Total expenses

Expenses comprise operating expenses, central costs and acquisition costs and related items. Operating expenses are those costs incurred through the operating activities of the Group's operating segments; Asset Management and Wealth Management. Central costs are those arising from capital and treasury management activities, corporate development and strategy activities and the costs associated with the governance and corporate management of the Group. Acquisition costs and related items include deal costs associated with corporate transactions and costs associated with the integration of acquired businesses and amortisation of acquired intangible assets.

The employee benefits expense net of hedging includes £19.7 million (2021: £6.6 million) that is presented within acquisition costs and related items.

4. Tax expense

(a) Analysis of tax charge reported in the income statement

(b) Analysis of tax (credit)/charge reported in other comprehensive income

(c) Analysis of tax charge/(credit) reported in equity

(d) Factors affecting tax charge for the year

The UK standard rate of corporation tax for 2022 is 19% (2021: standard rate of 19%). The tax charge for the year is higher (2021: higher) than a charge based on the UK standard rate. The differences are explained below:

Effects of:

5. Earnings per share

Reconciliation of the figures used in calculating basic and diluted earnings per share:

¹The 2021 comparatives have been restated following the simplification of the Company's dual share class structure (see note 13).

Profit after tax attributable to non-controlling interest was £6.5 million (2021: £11.9 million).

Operating earnings per share calculations are based on operating profit after tax of £599.4 million (2021: £693.6 million) less non-controlling operating earnings of £10.4 million (2021: £14.7 million).

6. Dividends

¹Dividends per share have been restated following the simplification of the Company's dual share class structure (see note 13).

Dividends of £12.6 million (2021: £9.1 million) on shares held by employee benefit trusts have been waived and dividends may not be paid on treasury shares. The Board has recommended a 2022 final dividend of 15.0 pence per share (2021 restated final dividend: 14.9 pence), amounting to £232.8 million (2021 final dividend: £231.5 million). The dividend will be paid on 4 May 2023 to shareholders on the register at 24 March 2023 and will be accounted for in 2023.

In addition, the Group paid £9.3 million of dividends to holders of non-controlling interests in subsidiaries of the Group during 2022 (2021: £9.8 million), resulting in total dividends paid of £341.4 million (2021: £328.4 million).

The Company offers a dividend reinvestment plan (DRIP). The last date for shareholders to elect to participate in the DRIP for the purposes of the 2022 final dividend is 12 April 2023. Further details are contained on the Group's website.

7. Fair value measurement disclosures

The Group holds certain assets and liabilities at fair value. Their categorisation within the fair value hierarchy is shown below: