Maturing funds support first-half income for St. James's Place

St. James's Place reported gross inflows of £9.1bn in its first half on Thursday, down marginally from £9.2bn year-on-year, as retention of client funds remained “strong” at 96.5%.

The FTSE 100 company said net inflows for the six months ended 30 June were £5.5b - flat on the same time last year, and representing 7.1% of opening funds under management on an annualised basis.

Group funds under management totalled £142.3bn at period end, down from £154bn at the end of December.

The firm recorded an underlying cash result for the period of £198.8m, rising from £189.3m a year ago.

EEV operating profit improved to £914.2m from £844.8m, while IFRS profit after tax jumped to £205.6m from £120.9m.

The board announced an interim dividend of 15.59p per share, up from 11.55p a year ago and representing 30% of the prior full-year distribution.

St. James’s Place said its EEV net asset value per share was £15.74 on 30 June, down from £16.57 on 31 December.

“After a year that saw global economies and investment markets rebound across the world, the first half of 2022 has presented fresh challenges for individuals looking to save and invest for the future,” said chief executive officer Andrew Croft.

“Sharply rising inflation, geopolitical tensions, domestic political uncertainty and a more uncertain economic outlook, all present risks for those seeking confidence in their future.”

“This is an environment in which our advisers can add real value for their clients, helping them to stay on track.”

Croft noted that during the first half, the firm attracted £9.1bn of new client investments as advisers supported clients amid a “more challenging” external environment.

“The importance of retaining a long-term mindset is also a key factor behind the continued strength of retention rates, which has underpinned net inflows of £5.5bn, in line with the first half of 2021 and equivalent to 7.1% of opening funds under management on an annualised basis.

“While our new business performance has been strong, significant reversals in global investment markets have impacted our funds under management, which closed the half at £142.3bn.

“Although FUM has fallen since the start of the year, our income has been supported by the maturing of funds in gestation during the first half.”

That, together with continued discipline around how the company managed its resources, supported a “strong” financial result for the period with an underlying cash result of £198.8m, up 5% period-on-period, Andrew Croft said.

“We enter the second half of the year with a growing partnership ideally placed to continue helping clients in these uncertain times.

“Financial advice is needed now more than ever given the challenges facing individuals, both in the short- and long-term.

“Given current market conditions, we now expect full year gross and net flows of around £18bn and £11bn respectively, which would make 2022 our second highest ever year for flows and put the business even further ahead against our 2025 business plan objectives.”

At 1007 BST, shares in St. James’s Place were up 2.69% at 1,181.5p.

Reporting by Josh White at Sharecast.com.