Wealth manager St James's Place appeared to shrug-off uncertainties about the eurozone and the weak economic backdrop at the half-year stage to attract £2.76bn of new funds - boosting funds under management 8 per cent in the period to £30.9bn. That leaves the shares, trading well below embedded value, looking too cheap.
Total new business grew over 5 per cent year on year to £353.9m on an annual premium equivalent basis. Notably, pension single premiums jumped from £63.4m to £147.5m, while regular premiums nearly trebled to £26m. However, on a European embedded value (EEV) basis - that includes a measure of expected future cash flows - operating profits fell from £183.6m to £167.8m, although a positive investment return of £54.9m helped to boost EEV-based pre-tax profit by 21 per cent to £220.5m. Higher funds boosted fee and commission income by 14 per cent to £299.8m, while robust cash generation supported a hefty dividend hike - management expect to announce a similar increase in the final dividend.
Peel Hunt expects full-year adjusted pre-tax profit of £420.5m, giving EPS of 62.7p (from £371.5m and 39.5p in 2011).
| ST JAMES'S PLACE (STJ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 336p | MARKET VALUE: | £1.68bn | |
| TOUCH: | 336-337p | 12-MONTH HIGH: | 389p | LOW: 282p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 142p* | EMBEDDED VALUE: | 415p | |
| Half-year to 30 Jun | Net premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 20.9 | 59.1 | 9.80 | 3.20 |
| 2012 | 19.2 | 85.0 | 9.40 | 4.25 |
| % change | -8 | +44 | -4 | +33 |
Ex-div: 22 Aug Payment: 19 Sep *Includes intangible assets of £964m, or 192p a share | ||||
