St.James's Place posts record full-year FuM, bumps up dividend

St.James's Place posted a drop in full-year profits after tax despite finishing the period with record funds under management.

Nonetheless, voicing confidence that increasing FuM will generate increased returns over time, the firm bumped up its dividend payout.

"The fundamentals underlying the business remain strong and over time, increasing funds under management will generate increased returns," said St.James's Place boss, Andrew Croft.

"However, in the short term, our profit has been impacted by the more modest gross flows relative to the planned investment in the business for future growth.

FuM jumped 18.3% from the year before to reach a record £117.0bn, even as gross inflows declined by 3.9% to £15.1bn, thanks to "strong" client retention and positive investment returns.

In turn, the final dividend was raised 5.0% to 31.22p per share for a 3.1% increase in the full-year payout of 49.71p.

Croft described 2019 as "challenging" due to the uncertain macroeconomic backdrop, US-China trade dispute and the political envvironment domestically.

Client numbers increased over the year by 51,000 to hit 733,000.

The company also highlighted the positive response from clients in the latest Wealth Account Survey, with 89% having said that they were either "satisfied" or "very satisfied" with their overall relationship with St.James's Place.

Nevertheless, in response to client feedback, they had broadened access to the Flagstone cash management service and added new propositions linked to lifetime care plans.

The aim of the latter was to "help clients ensure care fees can be met if a need were to arise in the future."

New investments had also seen a "return to good growth" in the early part of 2020, the company said.

"The Parliamentary majority following the December 2019 General Election provides for longer-term political stability, which has translated into improved investor sentiment.

"This has consequently resulted in an increase in activity across the business with new investments seeing a return to good growth in the early part of 2020.

"Uncertainties remain for the UK and there are market concerns as a result of coronavirus, but we are encouraged by this start to the year which, together with the strength and scale of our business today, gives us confidence that we are well placed to continue to grow."

As of 1015 GMT, shares of St.James's Place were trading lower by 2.77% to 1,053.50p.