27th Feb 2019 08:00
LONDON (Alliance News) - St James's Place PLC on Wednesday said it ended a "good" 2018 with increased funds under management, despite a "difficult" fourth quarter, and hiked its payout.
The wealth manager declared an 8.3% increase in its final dividend to 29.73 pence, taking its total dividend for 2018 to 48.22p, up 13% on the 42.86p distributed in 2017. Analyst consensus had St James's Place paying a 47.3p total dividend.
St James's Place ended 2018 with GBP95.55 billion funds under management, in line with company guidance and a 5.3% increase on 2017's closing GBP90.75 billion funds under management.
In line with guidance, St James's Place suffered a GBP5.48 billion negative investment performance during 2018, swinging from a GBP6.20 billion investment gain in 2017. Chief Executive Officer Andrew Croft blamed the poor investment performance on a "difficult external environment" in the fourth quarter.
St James's Place net inflows increased 8.1% to GBP10.28 billion from GBP9.51 billion in 2017, with gross inflows increasing 7.5% to GBP15.70 billion, in line with the company's guidance.
The wealth manager's flows were driven by its Pension funds, with gross flows of GBP8.76 billion and GBP6.55 billion in net inflows into the Pension business. The Pension business did suffer a negative impact of GBP1.98 billion on investment return, however.
"I am pleased to report a good set of results for 2018, building on an exceptional outcome in 2017 and despite a difficult external environment in the last quarter of the year. This demonstrates once again the resilience of our business" said Croft.
The wealth manager's Pension funds under management increased in 2018 to GBP40.72 billion from GBP36.15 billion, contributing to the company's overall rise in funds as its two other businesses - Investment and Unit Trust/ISA & Discretionary Fund Management - lost 2.4% and gained 3.5% in funds, respectively.
By asset class, St James's Place North American Equities fund - which makes up 22% of total funds - increased 3.5% to GBP20.7 billion from GBP20.0 billion last year.
The wealth manager's UK Equities fund - which makes up 18% of total funds - decreased by 8.3% over the course of 2018 to GBP17.7 billion from GBP19.3 billion. Fixed Interest funds - 19% of total funds - gained 11% during the recent year to GBP18.6 billion from GBP16.7 billion.
St James's Place has attributed the improvements to client retention. However, this this will be tested in 2019 as MiFID II requires UK financial advisers to disclose their charges to all clients by April 2019.
St James's Place European embedded value operating profit increased 9.1% to GBP1.00 billion, slightly behind consensus of GBP1.01 billion.
EEV new business contribution profit increased 9.3% to GBP852.7 million, ahead of consensus GBP842.3 million.
St James's Place ended 2018 with underlying cash of GBP309.0 million, up 9.9% on the previous year and ahead of consensus of GBP305.6 million.
St James's Place reported a rise of 8.0% in qualified advisers in 2018 to 3,954 from 3,661 last year.
"It is pleasing to see a recovery in the global stock markets at the start of 2019 which, together with on-going net inflows during January and February have, at the time of writing, taken our funds under management to some GBP102 billion. The business continues to perform well relative to the industry. However, challenging external factors, like those currently being experienced, are not in our control and the pace of fund flows has moderated compared with last year. I would note though that the inflows for the same period last year represent a very strong comparative and March typically accounts for around 50% of the first quarter's flows," Croft added.
In the past 12 months, St James's Place shares have lost 13%.
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