Wealthy clients boost profits at St James’s Place

WEALTH manager St James’s Place yesterday beat expectations as it announced a 20 per cent jump in first half profits to £220.5m.

Analysts had thought sales would struggle as clients feared economic uncertainity in the Eurozone and kept their funds close to hand.

But instead St James’s said that new business hit £353.9m in the first half of this year, up from £335.6m in the last six months of 2011.

The firm said it expects to see growth continue for the rest of the year and increased its interim dividend by 33 per cent.

Uniquely, St James’s Place controls both its investments and its sales process, which involves a team of advisers known as the Partnership.

Chief executive David Bellamy told City A.M. that the firm’s core business is “solid, robust and resilient”.

“We’ve grown the Partnership in the first three months and the momentum that’s developing is very positive. This year’s recruitment is next year’s growth,” he said.

“We’ve got 1,700 people out there providing advice and attracting new funds so we can be confident that the net inflow will see improvements for shareholders.”

Around 90 per cent of the firm’s business comes from existing clients or referrals, with the typical customer aged around 55 and looking for a medium to long term investment to support them in old age.

“The mass affluent niche in the UK market is expected to continue to enable the company to grow its business steadily in a market place which is currently ex-growth,” said analyst Kevin Ryan of Investec.