25th Feb 2015 07:42
LONDON (Alliance News) - St James's Place PLC Wednesday made good on a promise to up its dividend by at least 40% due to a strong rise in its underlying cash results, as the FTSE 100 wealth management and financial advice group reported strong growth in 2014.
The full numbers for the company's last financial year come after last month's update that showed an 18% rise in funds under management, bolstered by a rise in new business sales and the success of a business model under which it provides face-to-face wealth management advice to clients.
In a statement, the group said its operating profit on a European embedded value (EEV) basis rose by 29% to GBP596.4 million in 2014, ahead of the GBP533.4 million forecast by financial analysts. EEV new business profit rose by 14% to GBP373.1 million. Its underlying cash result rose by 24% to GBP173.8 million, prompting a 46% rise in its dividend for the year as a whole to 23.30 pence per share.
"This gives a full year payout of 70% of the underlying cash, and in future years we expect our dividend payout ratio to be broadly in line with 75% of the cash result," Chief Executive David Bellamy said in a statement.
"This year we will seek to further strengthen our relationship with our clients by exploring opportunities to enhance our proposition, through the continual development of our approach to the management of their wealth and the addition of complementary services, so that we are able to offer a more complete proposition," Bellamy added.
A new banking service, powered by high-street lender Metro Bank, will be launched in April, providing clients with an overdraft facility with short-term funds secured against the value of their St James's Place investment portfolio.
St James's Place, which was promoted to the FTSE 100 last year after former majority owner Lloyds Banking Group PLC sold its stake in the company in 2013, has been a beneficiary of tougher UK regulation imposed on financial advice, while it is also looking to take advantage of major changes to pensions rules in the UK when the new rules due to come into force in April give people more control over how to invest their pensions.
IFRS profit before tax attributable to shareholders' returns fell to GBP182.9 million from GBP190.7 million.
By Samuel Agini; [email protected]; @samuelagini
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