39 slides from St. James's Place's earnings presentation, Feb 28, 2024
Slide 1: Full Year Results 2023
St Full Year James's | Results Place | 2023
Slide 2: Our 2023 results
Our 2023 results £168.2bn £15.4bn in client FUM in gross inflows 95.3% £5.1bn client retention rate in net inflows £14.7bn £19.8bn growth in FUM from investment performance total growth in FUM £392.4m Underlying post-tax cash result
Slide 3: Dividends
Dividends ◆ The Board recognises the importance of returns to shareholders ◆ Proposed final dividend of 8.00 pence per share ◆ Future dividend guidance updated
Slide 4: Coming up…
Coming up… 1 Observations 2 Challenges 3 Priorities
Slide 5: Observations
1 Observations 2 Challenges 3 Priorities
Slide 6: Considerable market opportunity
Considerable market opportunity 2023 2026 13.5m 14.3m UK mass affluent UK mass affluent individuals individuals £2.7tr £3.0tr in liquid assets in liquid assets Source: Global data
Slide 7: Scale and quality
Scale and quality 4,800+ financial advisers 2,600+ Partner businesses Doubled our client base in 10 years
Slide 8: The home of advice
The home ofadvice 958,000 clients that we serve 1,300 Partners and advisers from the SJP Academy 10% increase in BSPs completed in 2023
Slide 9: Our investment proposition
Our investment proposition 2.5% - 4.5% The amount by which Polaris returns have outpaced benchmarks £25bn attracted by Polaris – the UK’s fastest-growing multi-asset fund range Developing our product range into low-cost passives
Slide 10: Full Year Results 2023
St Full Year James's | Results Place | 2023
Slide 11: Challenges
1 Observations 2 Challenges 3 Priorities
Slide 12: Changes to our charging structure
Changes to our charging structure Sustainable for Improved simplicity Good for long-term the future and comparability business health
Slide 13: Our complaints provision
Our complaints provision ◆ Acceleration in complaints in late 2023 related to ongoing servicing ◆ Assessment of historic data found gaps in evidence – largely before we implemented Salesforce in 2021 ◆ Exercise to explore potential client refunds of ongoing servicing charges
Slide 14: Full Year Results 2023
St Full Year James's | Results Place | 2023
Slide 15: Our 2023 financial results
Our 2023 financial results Strong underlying business ◆ Increased FUM and income 1 ◆ Cost control in line with guidance Short-term headwinds impacting financial results 2 in the year
Slide 16: New charging structure
New charging structure Clear Simplicity articulation Renewed charging of value structure that sets the business up for future success Comparability
Slide 17: Complaints experience
Complaints experience ◆ Acceleration in complaints in late 2023 related to ongoing servicing ◆ Exercise to explore potential client refunds of ongoing servicing charges ◆ Provision established of £426m gross of tax for potential processing of client refunds ◆ Salesforce and Consumer Duty work mean t
Slide 18: Underlying post-tax cash result
Underlying post-tax cash result £m Restated for new effective Like-for-like tax rate of 23.5% +1% Underlying post-tax cash 500 result of £392.4m Broadly flat excluding 400 corporation tax change 300 Impacted by: 200 410.1 ◆ Challenging economic 387.3 392.4 environment for new business 100 ◆ Higher m
Slide 19: Net income from FUM
Net income from FUM Net income from FUM grew £m by 4% on a like-for-like basis, Restated for new effective Like-for-like tax rate of 23.5% +4% excluding the increased rate 700 of corporation tax: 600 ◆ Increase in average mature FUM, including 500 over £40m contribution from maturing FUM in gestatio
Slide 20: FUM in gestation
FUM in gestation Gestation balance now stands at £47.6bn Gestation FUM future accumulated As the gestation FUM contribution to the Cash gradually matures over six £’million result1 years, it could contribute 2024 58.0 £270m to the Cash result 2025 100.0 2026 124.9 2027 173.5 No new gestation FUM fro
Slide 21: Margin arising on new business
Margin arising on new business Restated for new effective Like-for-like Like-for-like tax rate of 23.5% -10% -10% Movement in margin £m arising from new 140 business driven by: 120 ◆ Lower gross inflows year on year 100 ◆ Increased rate of 80 corporation tax 60 122.4 115.6 104.5 40 20 0 2022 2022 20
Slide 22: Controllable expenses
Controllable expenses Restated for new effective Like-for-like Like-for-like tax rate of 23.5% -10% +8% Controllable expenses of £m £283.3 million: 300 ◆ An 8% increase in pre-tax controllable expenses. 250 ◆ This is offset by an increase in the rate 200 of corporation tax 150 277.9 283.3 262.5 100
Slide 23: Net investment in Asia
Net investment in Asia Investment in Asia in 2023 includes: ◆ Costs of opening £m Dubai office 20 ◆ The impact of restructuring: 18 o Closure of Shanghai 16 office 14 o Modest Partner 12 rationalisation 10 19.4 8 Now expect to break even 6 11.3 in 2027 4 2 0 Anticipate net investment 2022 2023 of £1
Slide 24: Net investment in DFM
Net investment in DFM Delivered result slightly £m ahead of guidance with 20 total investment reducing 18 to £6.4 million 16 Entering final stages of 14 the back-office rebuild 12 10 8 Expect breakeven in 2024 6 10.9 4 6.4 2 0 2022 2023
Slide 25: FSCS levy and regulatory fees
FSCS levy and regulatory fees FSCS levy and regulatory 45 FSCS levy fees of £23.1m, down 42% 40.0 40 Other regulatory fees ◆ Decrease in levy costs for 2023 is due to a prior 35 year FSCS scheme surplus 30 27.3 23.1 25 20 FSCS levy expected to 10.0 increase to £15m net of 15 tax for 2024 10 12.7 13.
Slide 26: Shareholder interest
Shareholder interest Represents interest earned on working capital and Partner lending £m 70 60 Risen significantly year on year due to increases in 50 the Bank of England base rate 40 If the base rate remains at 61.8 30 5.25%, shareholder interest for 2024 could be £60-70m 20 10 15.9 As a reminder,
Slide 27: Miscellaneous
Miscellaneous £m Miscellaneous 50 costs include those items that do not 45 naturally sit in other 40 lines of the Cash result 35 30 Miscellaneous has 25 increased from £16.5m 20 to £35.8m, primarily 35.8 a result of increased 15 complaints provisions 10 16.5 5 0 2022 2023
Slide 28: Underlying post-tax cash result
Underlying post-tax cash result £m Restated for new effective Like-for-like tax rate of 23.5% +1% Strong core business result: 500 450 ◆ Growth in FUM and associated income 400 ◆ Cost control in line 350 with guidance 300 250 Robust underlying post-tax 200 410.1 cash result of £392.4 387.3 392.4 mil
Slide 29: EEV NAV per share
EEV NAV per share EEV NAV per share of £14.11, £ down 15% since 31 Dec 2022, 18 reflecting: 16 ◆ EEV loss in the period, 14 14.11 driven by exceptional changes to charge 12 structure and ongoing advice servicing provision 10 ◆ Payment of dividends 8 in 2023 6 4 2 0 2018 2018 2019 2019 2020 2020 2021
Slide 30: Solvency
Solvency Combined life company solvency position Solvency remains robust, with SII ratio increased as a result of: £’million 2023 2022 Net assets in excess of client ◆ Charge structure changes 446.9 377.7 liabilities ◆ Regulatory changes to risk margin Management solvency buffer (355.0) (355.0) Mana
Slide 31: Dividends
Dividends Proposed final dividend of 8.00 pence per share Total dividend of 23.83 pence per share
Slide 32: Revised shareholder distribution guidance
Revised shareholder distribution guidance Total distributions to be set at 50% of Underlying cash result 2023 2024 2025 2026 Dividend For next three years, total 23.83 18.00 18.00 18.00 distributions expected to (pence per share) comprise: Share repurchase - Balance Balance Balance ◆ 18p per share i
Slide 33: 2024 guidance summary
2024 guidance summary ◆ Net income from FUM margin ◆ Net investment in DFM ◆ No further tax relief range of 54 to 56 bps reflecting expected to break-even from capital losses corporation tax applicable in 2024 ◆ Growth in controllable ◆ FSCS levy of c.£20m expenses budgeted at 5% pre-tax/£15m net an
Slide 34: Full Year Results 2023
St Full Year James's | Results Place | 2023
Slide 35: Priorities
1 Observations 2 Challenges 3 Priorities
Slide 36: Our 2030 strategy
Our 2030 strategy Leading for the future Sustainable growth Leveraging our scale Cost and efficiency Improving returns
Slide 37: Significant market opportunities, strong competitive advantage
Significant market opportunities Strong competitive advantage Facing challenges head-on Developing SJP for the future
Slide 38: Q&A
Q&A Mark FitzPatrick Chief Executive Officer Will start at 9.15 Craig Gentle Chief Financial Officer
Slide 39: Full Year Results 2023
St Full Year James's | Results Place | 2023