Despite issuing a warning on this year’s profitability, results for Quilter (QLT) carried enough positive developments that shares in the advice-led wealth manager climbed by more than 4 per cent, on another down day for the FTSE 250.
First was the news that last year’s operating profit margin held firm at 26 per cent. That partly reflected a 13 per cent rise in assets under management to £110bn, the implication of which is that earnings are likely to be bruised in the first half of 2020, at least. Should equity markets remain where they are or sink further, meeting margin targets “will be a challenge”.
More encouragingly, Quilter successfully migrated 38,500 accounts £4.3bn of assets to its new platform last month, in line with a high-wire IT upgrade plan. The group also announced a well-trailed plan to buy back up to £375m-worth of stock, following last year’s disposal of the life assurance to ReAssure.
Quilter has also launched a so-called ‘odd-lot offer’, in which equity investors with fewer than 100 shares can sell their stock at a 5 per cent premium to the market price until November. The scheme – which will cost around £30m – should cut the costs of dealing with 220,000 shareholders who collectively hold just 0.89 per cent of the company.
Consensus forecasts are for earnings of 11.1p per share in 2020.
| QUILTER (QLT) | ||||
| ORD PRICE: | 139p | MARKET VALUE: | £ 2.64bn | |
| TOUCH: | 139-139.4p | 12-MONTH HIGH: | 179p | LOW: 122p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 109p* | NET CASH: | £2.14bn | |
| Year to 31 Dec | Fee income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 895 | -5 | 8.6 | nil |
| 2018*** | 954 | -20 | 26.6 | 3.3 |
| 2019 | 936 | 45 | 8.0 | 5.2 |
| % change | -2 | - | -70 | +58 |
| Ex-div: | 02 Apr | |||
| Payment: | 18 May | |||
| *Includes intangible assets of £592m, or 312p a share. **Figures prior to Old Mutual demerger. ***Excludes special dividend of 12p per share. | ||||
