St James’s Place rises as it restores final dividend

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St James’s Place PLC (LON:STJ) shares moved higher on Thursday after the wealth management group restored its final dividend after a rise in profits and net asset value (NAV).


In its results for the year to 31 December, the FTSE 100 firm reported a profit before shareholder tax of GBP327.6mln, up from GBP187.1mln in the previous year, while its NAV per share rose to 1,449p from 1,320p in 2019.


The results came despite a fall in net inflow of funds under management to GBP8.2bn from GBP9bn, although total funds under management still grew to GBP129.3bn from GBP117bn a year ago.


St James’s also proposed a final and total dividend for the year of 38.49p per share and said its previously withheld 2019 final dividend will be paid as an interim dividend during the first quarter of 2021. However, the final dividend was the only 2020 dividend payment, taking the full-year dividend lower than the 49.71p paid in 2019.


“At the outset of the pandemic the board made the difficult decision to withhold 11.22 pence of the 2019 final dividend, until such time when the financial and economic impact of [coronavirus] became clearer. I am pleased to report that we have not needed to utilise those funds and, whilst the pandemic is still on-going, we now have the confidence to pay this withheld amount as a further interim dividend during the first quarter”, chief executive Andrew Croft said in a statement.


The CEO also said the market outlook for its face to face advisory business model was “attractive”, and as a result of the scale of its business and progress in developing its technology infrastructure it looked to the future “with confidence”.


“I would highlight our ambition to deliver growth in new business of around 10% per annum which, with modest help from investment markets and continued high retention rates, would see funds under management grow to in excess of GBP200bn by the end of 2025. Growth on this scale will require continued investment but given the success of our technology initiatives in recent years, we believe overall expense growth can be held to around 5% per annum thereby delivering additional value for shareholders through operational leverage in the cash result. In turn, we are intending to pay-out around 70% of the underlying cash result in dividends annually over the period”, Croft said.


In the near term, the CEO said there was “moderate growth in new business” in the early weeks of 2021, and despite the challenging external environment, he was hopeful that an economic recovery following the pandemic will “see a return to more normal growth in new client investments”.


“The demand for trusted advice is stronger than ever and I am confident that given the quality of The Partnership, the strength of our client proposition, and the resilience of the St. James’s Place community, we are ideally placed to continue to grow and deliver on our new five year planning assumptions”, Croft concluded.


The company’s shares were up 1.2% at 1,242.5p in early trading.

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