St James’s Place (STJ) has just become more attractive to income seekers. Growth in funds under management, plus the decision to recognise more cash at the point business is written, pushed up cash levels by 41 per cent last year. That resulted in a dividend payout ratio representing 80 per cent of underlying cash, with future payments to be set using this higher ratio.
The wealth manager gained net inflows of £9.5bn last year, more than half of which was destined for its pension business. Pension freedom changes, as well as higher transfer values for defined-benefit scheme members, prompted greater interest in pension transfers. Together with investment returns of £6.2bn, total funds under management rose by a fifth to a record £90.8bn.
St James’s Place differs from many of its UK-listed peers as it doesn’t have relationships with third-party financial advisers. Instead, it targets new business gains via its own partnership network, which grew to 3,661 advisers during the period – a 7 per cent increase. Investment focused on Asian expansion continued, increasing adviser numbers by almost a fifth. Meanwhile newly acquired discretionary fund management business Rowan Dartington grew its funds under management by a third to £2.1bn.
Analysts at Shore Capital expect an adjusted net asset value (NAV) of 1,114p a share (ex dividends) at the end of December 2018, up from 1,040p at the same time last year.
| ST JAMES'S PLACE (STJ) | ||||
| ORD PRICE: | 1,164.5p | MARKET VALUE: | £6.16bn | |
| TOUCH: | 1,164.5-1,165p | 12-MONTH HIGH: | 1,280p | LOW: 1,008p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 200p | EMBEDDED VALUE: | 1,068p | |
| Year to 31 Dec | Gross written premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
| 2013 | 61.2 | 191 | 37.4 | 15.96 |
| 2014 | 57.4 | 294 | 36.6 | 23.30 |
| 2015 | 54.7 | 174 | 38.9 | 27.96 |
| 2016 | 52.2 | 486 | 21.5 | 33.00 |
| 2017 | 49.9 | 342 | 27.8 | 42.86 |
| % change | -4 | -30 | +29 | +30 |
| Ex-div: | 5 Apr | |||
| Payment: | 1 Jun | |||
