St James's Place H1 profit slips but dividend lifted

Wealth manager St James’s Place reported a drop in first-half pre-tax profit but lifted its dividend and reported record net inflows.

For the six months to 30 June, IFRS pre-tax fell to £97m from £103.7m in the same period last year. The group said its underlying performance was once again impacted by a heightened levy charged by the Financial Services Compensation scheme of £17m.

St James said this expense impacts all profit measures, but it remains hopeful that the elevated levy imposed over the last two years will return to a more normalised level in future years.

During the period, the company saw gross inflows of funds under management of £5.3bn compared to £4.4bn in 2015, while net inflow sof funds under management came in at a record £3.1bn from £2.7bn.

Group funds under management stood at £65.6bn compared to £55.5bn in 2015.

New business profits rose to £228.9m from £205.9m and the company declared an interim dividend of 12.33p per share, up from 10.72p the year before. Shore Capital had been expecting new business profits of £222m, while consensus had pencilled in £225m.

Chief executive David Bellamy said: “Despite continued volatility in world stock markets and political uncertainty across Europe, I am pleased to once again be reporting a strong first half performance and continued positive momentum in our business. Bearing testament to the reassuring consistency and resilience of our business, I am particularly pleased that we achieved record gross and net inflows in the second quarter, up 23% and 25% respectively.

“Without being complacent about the possible consequences of Brexit, the proven strength in our business model and ongoing momentum gives us confidence in our ability to deliver continued growth in line with our objectives. Indeed, I can report that new fund flows since the referendum remain in line with those medium term objectives.”

Shore Capital said the results were ahead of both its and consensus estimates across almost all of the key metrics of inflows, FUM, new business profits and dividend.

“We expect the market to respond favourably to the commentary on the performance post-Brexit, namely that fund flows continue ’in line with medium term objectives’, to the 15% growth in dividend and the overall excellent delivery in H1 2016,” said Shore.

At 0852 BST, shares were up 4.8% to 926.50p.