Sliding equity markets last year meant a negative investment return at wealth manager St James's Place – which largely explains the slide in reported IFRS profits. But investors shouldn't focus too much on that volatility-driven outcome – after all, new business rose 10 per cent in the year, while group operating profit on a European Embedded Value (EEV) basis increased 12 per cent to £371m.
Moreover, total funds under management grew 6 per cent year on year to £28.5bn, driven by a total net inflow of funds of £3.3bn. That solid fund growth helped the life business to boost EEV operating profit by 15 per cent in the year to £294m, while the unit trust business saw EEV profit rise 3 per cent to £84.5m – that division's performance would have been better still but for a £3.5m levy from the Financial Services Compensation Scheme. Fee and commission income rose an impressive 15 per cent to £525m as well.
Management remain bullish about growth prospects and chief executive David Bellamy is confident of achieving annual growth targets of 15 per cent-plus over the longer term.
Prior to these figures, broker Numis Securities forecast 2012 EPS of 19p and a year-end embedded value of 400p a share.
ST JAMES'S PLACE (STJ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 376p | MARKET VALUE: | £1.9bn | |
| TOUCH: | 375-376p | 12-MONTH HIGH: | 383p | LOW: 282p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 136p* | EMBEDDED VALUE: | 385p | |
| Year to 31 Dec | Net premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 69.9 | 103 | 16.8 | 4.30 |
| 2008 | 59.9 | -31 | 14.2 | 4.39 |
| 2009 | 55.0 | 29 | 8.3 | 4.50 |
| 2010 | 50.0 | 162 | 11.4 | 6.00 |
| 2011 | 43.7 | 21 | 21.9 | 8.00 |
| % change | -13 | -87 | +92 | +33 |
Ex-div: 28 Mar Payment: 16 May *Includes intangible assets of £921m, or 185p a share | ||||
