11th Mar 2020 10:46
(Alliance News) - Quilter PLC on Wednesday reported a swing to profit in 2019 and said it is launching a GBP375 million share buyback programme to reduce the share capital of the company.
Quilter has appointed JP Morgan Securities PLC to manage the programme, with an initial tranche of GBP22.5 million in each of South Africa and the UK.
However, Quilter said for the UK buyback the total amount may be increased by up to a further GBP5 million.
Quilter is also launching an odd-lot offer in which shareholders with fewer than 100 shares will be able to sell shares at a 5% premium to the market price.
Quilter explained it has "an unusually large" number of small shareholders for a company of its size. Quilter has more than 460,000 shareholders of which 220,000, or 48%, are small shareholders who hold fewer than 100 shares and, in aggregate, represent a 0.9% holding.
The recurring costs of administration from the large number of shareholders are disproportionate to the size of a small shareholding and affect shareholders as a whole, Quilter explained.
Quilter shares were trading 5.2% higher in London on Wednesday at 139.75 pence each, while in Johannesburg the stock was up 4.5% at ZAR29.24 a share.
Turning to results, the financial services provider reported pretax profit of GBP45 million for the year compared to a GBP20 million loss in 2018.
Quilter said the swing reflected stable revenue margins coupled with an increase in average assets under management & administration, and was supported by "strong" cost discipline and optimisation.
Assets under management & administration, excluding Quilter Life Assurance, increased 13% to GBP110.4 billion from GBP97.7 billion at the end of 2018.
Total net fee revenue increased by 3% to GBP808 million from due to higher average assets under management & administration, primarily as a result of the rebound in equity markets in 2019.
Expenses increased modestly in 2019, Quilter noted, as a result of investment. Excluding acquisitions, expenses remained stable year-on-year.
Quilter has proposed a final dividend of 3.5 pence per share to provide a full year dividend of 5.2p per share. A year ago, the company paid 3.3p per share, excluding a special dividend of 12.0p per share.
Looking ahead, Chief Executive Paul Feeney said: "2020 began well but the sharp coronavirus induced market correction beginning in late February has created a level of uncertainty as to the outlook for the remainder of 2020.
"Notwithstanding short term market sentiment, we remain optimistic on the long-term secular opportunity across our markets and Quilter is strategically well positioned to benefit from this."
In addition, Quilter said Directors Cathy Turner and Suresh Kana will not seek reelection at the company's annual general meeting on May 14 and will thus stand down from the board.
Quilter explained Turner has recently taken up an appointment as a board member at FTSE 100 pest control firm Rentokil Initial PLC and can no longer commit the required time to her duties at Quilter.
Meanwhile, Kana's decision to step down is due to the travel required as a result of his serving on a UK board from South Africa, in addition to other existing international commitments.
An external search agency has been appointed to help us identify successors for both Turner and Kana, Quilter said.
By Evelina Grecenko; [email protected]
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