The market's initially harsh reception of half-year numbers from wealth manager St James's Place (STJ) reflected the surprise hike in its annual Financial Services Compensation Scheme levy, which is booked during the first half. This is calculated based on the amount of compensation that has been paid by the scheme in the prior period, and big payouts following the Keydata mis-selling scandal, among others, have upped the burden on the whole financial advice industry. St James's Place was made to stump up £20m, compared with £6.9m last time around.
But once the shock had faded, the wealth manager's shares recovered as investors considered the net inflow of funds under management, which was 13 per cent higher than last year at £2.7bn. Shareholders also had the acquisition of discretionary fund management (DFM) provider Rowan Dartington to digest. This will allow the manager to develop a DFM business, giving clients access to direct equity holdings and stockbroking services. It also demonstrates how St James's Place is converging with wealth managers such as Brewin Dolphin (BRW) and Rathbone Brothers (RAT), which are themselves providing more of the risk-graded portfolios in which St James's specialises.
Analysts at Numis expect embedded value per share - which factors in the future cash flows of maturing business - of 725p at year-end, compared with 657p last December.
| ST JAMES'S PLACE (STJ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 953p | MARKET VALUE: | £4.99bn | |
| TOUCH: | 951.5-953p | 12-MONTH HIGH: | 1,008p | LOW: 637p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 190p* | EMBEDDED VALUE: | 684p | |
| Half-year to 30 Jun | Gross life premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 27.4 | 110 | 12.9 | 8.93 |
| 2015 | 25.9 | 104 | 10.4 | 10.72 |
| % change | -5 | -6 | -19 | +20 |
Ex-div: 3 Sep Payment: 2 Oct *Includes intangible assets of £829m, or 158p a share | ||||
