Wealth manager St James’ Place beat estimates and reported a modest rise in net inflows due to a recovery in market sentiment following the coronavirus-induced selloff.
Net cash inflows rose two per cent to £4.5bn in the six months to the end of June, beating the consensus expectation of £4.4bn, the same as last year.
The net flows increased as retention increased to 96 per cent, indicating the strength of the franchise.
Pre-tax profit for the period jump from £57.3m to £221.9m, but the firm’s underlying cash result fell to £114.4m.
St James’ Place reported group funds under management of £115.7bn, a six per cent increase year on year and only slightly down from the record £117bn reported at year-end.
Why it’s interesting
The wealth manager said that while its balance sheet remained “robust” and there was some semblance of normality returning, there remained significant uncertainty.
As such, St James’ Place said it will continue to retain approximately one third of the previously proposed 2019 final dividend “until such a time as the financial and economic impacts of Covid-19 become clearer”.
It added that while the UK recovers from lockdown, “we still expect new business flows for the third quarter to be similar or slightly lower in terms of value to the level of flows recorded for the second quarter.”
What St James’ Place said
Chief executive Andrew Croft said: “We began the year with renewed confidence and momentum in the business as we saw investor sentiment rise following the UK General Election in December 2019, but this gave way to a challenging external environment in the UK as COVID-19 related lockdown and associated social distancing measures impacted the way we and the Partnership conduct business.”
“I am, though, pleased to report a robust set of results for the first six months of 2020, which is testament to the resilience of our business.”
“Overall then, 2020 is set to be another year of major net inflows as our business model proves resilient in a really difficult period. We are more confident than ever that we will deliver growth over the longer term given the strengths of St. James’s Place and the dynamics of our market.”