11th Aug 2020 07:48
(Alliance News) - Wealth management firm Quilter PLC on Tuesday reported a decline in profit and revenue for the first half of 2020, due to mostly external conditions including lower markets.
For the six months to the end of June, adjusted pretax profit dropped by 38% to GBP71 million from GBP115 million for the same period a year before. This was on revenue that declined by 4% to GBP335 million from GBP348 million, due to the Covid-19 pandemic and its impact on equity markets.
Also adding to the declining performance was a dip by 2.7% in assets under management & administration to GBP107.4 billion as at June 30 from GBP110.4 billion at the end of December, driven by negative market movements, mainly from the FTSE 100 index being 18% lower for the period.
However, Quilter reported positive net client cash flow of GBP1.1 billion, more than tripled from around GBP300 million a year before, as lower outflows more than offset a 3.3% fall in gross sales of GBP5.8 billion from GBP6.0 billion.
Quilter declared an interim dividend of 1.0 pence, down 41% from 1.7p the prior year.
Looking ahead, Quilter said it remains cautious since it believes that the full economic impact of Covid-19 is yet to be felt, and there is still the risk of further local lockdowns and waves of infection.
There are also other external geopolitical factors, such as the US election in November, deteriorating US-Sino relations and the conclusion of the Brexit transition period at the end of 2020, which can add to market volatility, the Anglo-South African firm noted.
Although Advice revenue have remained strong, Quilter expects a more muted contribution from the mortgage and protection business in the second half as the housing market restabilises.
In addition, Quilter Investors is expected to see further margin erosion as a result of ongoing mix shift from client and adviser behaviour.
"The first half of 2020 was a uniquely challenging environment which has forced us all to reconsider the way we socially interact and undertake business activities. In terms of our financial performance, strategic progress and focus on operational improvement, I am pleased Quilter has come through this period extremely well and delivered for all our stakeholders - colleagues, clients, communities as well as our owners," said Chief Executive Officer Paul Feeney.
"Our cautious outlook with broadly stable market conditions for the remainder of the year means we continue to expect revenue headwinds. As a consequence, we will maintain a firm handle on expenses with a modestly lower second half out-turn for costs anticipated to offset the expected impact from revenue headwinds," Feeney added.
By Dayo Laniyan; [email protected]
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