28th Jul 2020 09:08
(Alliance News) - St James's Place PLC on Tuesday reported a drop in assets under management and cancelled its interim dividend, but is confident 2020 will be a year of "major" net inflows.
At June 30, the FTSE 100-listed wealth manager reported funds under management of GBP115.68 billion, down 1.1% from the GBP116.99 billion seen at the beginning of the six months.
"The first half of 2020 has been an extraordinary period, both here in the UK and across the world, as the Covid-19 pandemic has profoundly impacted all our lives," Chief Executive Andrew Croft said.
He continued: "We began the year with renewed confidence and momentum in the business as we saw investor sentiment rise following the UK general election in December 2019, but this gave way to a challenging external environment in the UK as Covid-19 related lockdown and associated social distancing measures impacted the way we and the Partnership conduct business.
"I am, though, pleased to report a robust set of results for the first six months of 2020, which is testament to the resilience of our business. This extends beyond the resilience of our business model to include our people, the Partnership, our systems and technology, and our finances, leaving us well positioned to make the most of the opportunities and challenges ahead," Croft added.
Investment funds shrank 4.3% to GBP29.88 billion whilst Unit Trust/ISA & Discretionary Fund Management declined 2.0% to GBP32.28 billion. Pension funds, however, increased 1.3% to GBP52.84 billion.
By asset class, St James's Place North American Equities fund - which makes up 22% of total funds - fell slightly over the first half to GBP25.1 billion from GBP25.0 billion at the end of 2019.
The wealth manager's UK Equities fund - which makes up just 15% of total funds - fell by 14% to GBP17.3 billion from GBP20.2 billion. Fixed Income Securities - 18% of total funds - lost 1.4% to GBP20.6 billion from GBP20.9 billion.
Group net inflows were GBP4.52 billion. Offsetting this, however, was an investment loss of GBP5.83 billion. The firm also recorded GBP2.02 billion in surrenders and GBP720 million in income withdrawals.
The Cirencester, England-based wealth manager recorded a European embedded value operating profit - the company's preferred metric - of GBP418.7 million, down 10% year-on-year from GBP465.7 million.
As announced back in April, St James's Place will pay no interim dividend, compared to a 18.49 pence payout a year before. St James said Tuesday it will make dividend decision for 2020 in February 2021, when it hopes to be in a better position to assess the impact of Covid-19.
Croft said: "We are then hopeful that, as the country returns from the summer break refreshed and ready for a return to the office, and supported by the high levels of client service provided by the Partnership since lockdown, we will see momentum build through the final quarter.
"Overall then, 2020 is set to be another year of major net inflows as our business model proves resilient in a really difficult period. We are more confident than ever that we will deliver growth over the longer term given the strengths of St James's Place and the dynamics of our market."
Shares in St James's Place were 0.4% higher in London on Tuesday morning at 970.20 pence each.
By Paul McGowan; [email protected]
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