Quilter plans new capital return after solid year

Quilter reported a 13% improvement in assets under management and administration (AuMA) from its continuing operations on Wednesday, to £111.8bn, supported by improved net flows and positive market movement.

At the same time, it proposed a capital return of £328m - equivalent to 20p per share - from the proceeds of the sale of Quilter International, subject to shareholder approval.

The FTSE 250 company said net inflows for the year ended 31 December totalled £4.0bn, up from £1.5bn, with “particularly strong” performance from the new Quilter Investment Platform which brought £3.5bn of net inflows - up 133% on the prior year.

It also recorded an improved operating margin of 22%, up from 19%, with revenues rising 10% and expenses growing 5% as a result of the “unusual operating environment” of the prior year due to Covid-19.

Adjusted profit before tax from continuing operations increased 28% to £138m, and the company swung to an IFRS profit before tax of £12m from a loss of £27m.

Quilter’s adjusted diluted earnings per share from continuing operations increased 42% to 7.4p, supported by a low tax rate arising from a deferred tax credit in the first half of 2021, and a reduced share count due to the capital return programme.

The board declared a final dividend of 3.9p per share, up from 3.6p in 2020, bringing the total distribution for the year to 5.6p per share - up 22%.

On a statutory basis, Quilter reported IFRS profit after tax from continuing operations of £23m, up from £13m, and basic earnings per share from continuing operations of 1.4p, rising from 0.8p.

Statutory diluted earnings per share from continuing operations grew to 1.4p from 0.8p, and the company’s Solvency II ratio was 275% after the final dividend, up from 217% at the end of 2020.

“2021 was an important year for Quilter as we completed our planned strategic evolution through the successful migration of customers and advisers onto our new platform and completed the sale of Quilter International for £481m,” said chief executive officer Paul Feeney.

“We also demonstrated strong financial performance with more than doubled net inflows of £4 billion and achieved revenue growth of 10% while limiting cost growth to 5% to deliver adjusted profit growth of 28%.

“Our confidence in our prospects is reflected in the board's decision to lift the full-year dividend by 22% to 5.6p.”

Feeney said capital discipline was a “key element” of “the Quilter philosophy”, noting that the company completed a £375m buyback from the Quilter Life Assurance proceeds in early 2022, while it was also proposing a capital return of £328m - or 20p per share - from the Quilter International sale proceeds.

“We are pleased to be delivering good results in these difficult times with significant geopolitical tensions at the centre of all our concerns.

“In 2022, our focus remains on managing our business towards delivering the targets we set out at our capital markets day last November.

“This will include increasing flows to our platform, particularly from third party advisers, product innovation and growth in our restricted adviser base.”

At 0927 GMT, shares in Quilter were up 7.9% in London at 126.89p.