25th Feb 2016 14:22
LONDON (Alliance News) - Wealth manager St James's Place PLC capped a strong 2015 with a hike to its dividend on Thursday as its operating profit came in ahead of expectations and it expressed confidence on its outlook.
The FTSE 100-listed company benefited in 2015 from the secular shift away from the government and employers being involved in retirement planning to more individual responsibility, a move which does not look likely to reverse any time soon. Last year, in particular, St James's Place benefited from changes made by Chancellor George Osborne to pensions tax relief.
Operating profit, stated on an embedded value basis, rose to GBP660.2 million in 2015 from GBP596.4 million, substantially ahead of company-compiled analyst expectations of GBP553.4 million.
EEV is a measure designed to allow for greater consistency in calculating the embedded value of life insurance business, given the level of subjectivity often involved in making such calculations due to the long-term nature of life insurance contracts.
The beat prompted the group to declare a final dividend of 17.24 pence per share, up from 14.37p a year earlier, meaning its total dividend payout rose to 27.96p, a 20% hike on the previous year. The rise was broadly in line with analyst estimates for the dividend to hit 28.0p
Net inflows rose to GBP5.78 billion from GBP5.09 billion, helping to boost funds under management to GBP58.6 billion from GBP52.0 billion. The results reflected increased investment in adviser numbers, which rose by 10% to 3,113 over the course of the year.
Analysts prior to the results had suggested significant value lay in the face-to-face advisory model used by St James's Place, and the company affirmed that on Thursday, arguing the personalised service it provides is welcomed by customers having to take increasingly complex decisions about their financial affairs.
Looking to 2016, the company said it plans to roll-out further supplementary investment services to complement its existing offering and will look to boost its estate planning business to respond to growing demand from its clients.
It remains confident on its growth prospects for the coming year and said its businesses remain well-placed.
"Despite the continued uncertainty in world stock markets, the strong growth across all key areas once again demonstrates the resilience of the business and delivered another record year of new investments, funds under management and operating performance," Chief Executive David Bellamy said.
"We see a growing demand for sound, personal, financial planning advice as individuals recognise the financial implications of increased life expectancy, whilst being faced with increasingly complex options in respect of their investments. That increasing demand, coupled with the ongoing growth in the size of the Partnership, means that we remain well placed to continue our growth in 2016 and beyond, in line with our medium term objectives," Bellamy added.
Shares in the company were up 0.8% to 863.50p, having started the day lower at 839.00p.
By Sam Unsted; [email protected]; @SamUAtAlliance and Samuel Agini; [email protected]; @samuelagini
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