St. James's Place Plc · LSE:STJ
St. James's Place — FY2007 Earnings Presentation
38 slides from St. James's Place's earnings presentation, Feb 26, 2008
Slide 1: Preliminary Results
PRELIMINARY RESULTS February 2008
Slide 2: Presenters
Mike Wilson CHAIRMAN David Bellamy CHIEF EXECUTIVE Andrew Croft FINANCE DIRECTOR Ian Gascoigne SALES DIRECTOR David Lamb BUSINESS DEVELOPMENT DIRECTOR
Slide 3: Agenda
Agenda Introduction MIKE WILSON Financials ANDREW CROFT New Business DAVID BELLAMY Partnership IAN GASCOIGNE Summary MIKE WILSON
Slide 4: Andrew Croft, Finance Director
ANDREW CROFT Finance Director
Slide 5: EEV Profits
EEV Profits £’m 2007 2006 Life 189.9 139.0 Unit trust 59.0 39.9 Combined life and unit trust 248.9 178.9 Other operations (4.2) (2.9) Operating profit 244.7 176.0 +39% Investment variance (14.5) 70.8 Economic changes 0.2 (9.8) LAHC - 7.0 Pre-tax profit 230.4 244.0 Normalised tax (62.1) (59.8) Tax ra
Slide 6: Analysis of Life & Unit Trust Pre-Tax Operating Profit
Analysis of Life & Unit Trust Pre-Tax Operating Profit £’m 2007 2006 New business contribution 150.9 115.2 +31% Profits from existing business –expected 77.7 65.5 –experience variance 16.2 (2.4) –operating assumption changes (2.8) (5.5) Investment income 6.9 6.1 Operating profit 248.9 178.9
Slide 7: 2007 New Business Contribution
2007 New Business Contribution • Margin as % of APE expanded to 35.2% from 33% achieved for the 2006 full year • Margin as % of PVNBP increased to 4.5% from 4.3% for the 2006 full year
Slide 8: Development of New Business Contribution
Development of New Business Contribution £’m 2007 2000 APE 428.6 187.3 +129% New business contribution 150.9 55.0 +174% Margin 35.2% 29.4%
Slide 9: Analysis of Life & Unit Trust Pre-Tax Operating Profit
Analysis of Life & Unit Trust Pre-Tax Operating Profit £’m 2007 2006 New business contribution 150.9 115.2 +31% Profits from existing business –expected 77.7 65.5 –experience variance 16.2 (2.4) –operating assumption changes (2.8) (5.5) Investment income 6.9 6.1 Operating profit 248.9 178.9
Slide 10: Net Asset Value per Share
Net Asset Value per Share Net asset value 252.5 pence Fully diluted net asset value 250.3 pence
Slide 11: Dividend
Dividend • Interim dividend 1.75 pence up 17% • Final dividend 2.55 pence up 19% • Full year dividend 4.3 pence up 18%
Slide 12: Analysis of Post Tax Cashflow
Analysis of Post Tax Cashflow £’m 2007 2006 Net annual management fee 123.2 93.2 Unwind of surrender penalties (44.6) (32.6) Loss/profit arising on new business (7.7) 1.9 Establishment expenses (67.3) (62.1) Investment income 10.5 9.4 Miscellaneous 11.8 12.1 Underlying cash flow 25.9 21.9 +18% One o
Slide 13: Analysis of Post Tax Cashflow (continued)
Analysis of Post Tax Cashflow (continued) £’m 2007 2006 Arising on in force business 84.7 68.2 +24% Arising from new business (58.8) (46.3) One offs 7.2 43.5 33.1 65.4
Slide 14: Movement in Funds Under Management
Movement in Funds Under Management £’bn 2007 2006 Opening funds under management 15.4 12.3 New money invested 3.1 2.4 Investment return 0.9 1.7 19.4 16.4 Regular income (0.3) (0.2) withdrawals / maturities Surrender / part surrenders (0.9) (0.8) Closing funds under management 18.2 15.4 Implied surre
Slide 15: David Bellamy, Chief Executive
DAVID BELLAMY Chief Executive
Slide 16: Objective and Actual New Business Growth
Objective • New Business Growth 15% - 20%pa Actual • Average over last ten years 16%pa • Average over the last five years 23%pa
Slide 17: 2007 Full Year New Business Highlights
2007 Full Year New Business Highlights • New Business up 23% • New Single Investments up 27% • New Pension Single Investments up 33% • Funds under Management up 18% • Partnership numbers up 8%
Slide 18: 2007 Full Year New Business Annual Premium Equivalent
2007 Full Year New Business Annual Premium Equivalent Investment £236.0m +27% Pension £172.3m +23% Protection £20.3m (10)% Total £428.6m +23% Manufactured business represents 87%
Slide 19: New Business by Quarter
New Business by Quarter APE (Annual premiums plus 10% of single premiums) 2005 2006 2007 £115.7m £113.2m £101.9m £103.1m £97.8m £91.5m £85.1m £69.4m £65.0m £59.6m £52.2m £44.2m Q1 Q2 Q3 Q4 2005 over 2004 +1% +29% +29% +39% 2006 over 2005 +57% +54% +63% +59% 2007 over 2006 +41% +26% +20% +10%
Slide 20: Pension New Business by Quarter
Pension New Business by Quarter APE (Annual premiums plus 10% of single premiums) 2005 2006 2007 £48.3m £46.1m £44.5m £40.2m £39.3m £38.0m £35.4m £20.6m £21.2m £20.7m £16.3m £13.3m Q1 Q2 Q3 Q4 2005 over 2004 +11% +39% +15% +41% 2006 over 2005 +55% +79% +117% +123% 2007 over 2006 +95% +17% +11% +5%
Slide 21: Investment New Business by Quarter
Investment New Business by Quarter APE (Annual premiums plus 10% of single premiums) 2005 2006 2007 £66.2m £57.8m £59.2m £52.8m £51.2m £47.6m £43.2m £44.5m £37.7m £32.4m £29.8m £25.3m Q1 Q2 Q3 Q4 2005 over 2004 -2% +34% +49% +50% 2006 over 2005 +71% +47% +49% +36% 2007 over 2006 +22% +39% +30% +16%
Slide 22: Growth in Single Investments (£bn)
Growth in Single Investments (£bn) +28% +62% 3.4 2.6 +33% +24% 1.6 1.2 1.0 2003 2004 2005 2006 2007
Slide 23: Funds Under Management (£bn)
Funds Under Management (£bn) £18.2bn +18% +25% +29% +20% +34% +24% +10% -6% +47% +31% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 24: Investment Management Approach
Investment Management Approach • 37 Funds • 15 Fund Managers • Investment Committee – Chair Sir Mark Weinberg • Stamford Associates – leading independent consultants
Slide 25: Top Quartile Performance in 2007
Investment Management Approach Top Quartile Performance in 2007 • THSP, Newton, Jupiter & AXA Framlington (Managed Funds) • Invesco Perpetual & Schroders (Income Funds) • MPC (UK Growth Unit Trust) • Neil Woodford (UK Equity Fund)
Slide 26: Investment Management Approach: Over the Longer Term
Investment Management Approach Over the longer term • Two thirds of all funds under Management in top quartile over 5 years • Pension funds managed by THSP & GAM achieved out-performance of 4% pa since launch
Slide 27: St. James's Place Wealth Management
_ ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 28: Wealth Manager of the Year 2007 Award
~ ST. JAMES’S PLACE WEALTH MANAGEMENT Winner Hay Winner at (© The Daily Telegraph ST. JAMES’S PLACE Wealth Manager WEALTH MANAGEMENT of the Year 2007
Slide 29: Ian Gascoigne, Sales Director
IAN GASCOIGNE Sales Director
Slide 30: The Partnership Develops
The Partnership Develops 2003 2007 77% 29% 53% 18% 18% 5% Below Partner Partner Double Partner+
Slide 31: The Partnership Develops
The Partnership Develops Double Partner Qualifiers 219 183 102 67 54 2003 2004 2005 2006 2007
Slide 32: The Partnership Develops
The Partnership Develops Average APE per Partner (£k) 356 312 193 157 133 2003 2004 2005 2006 2007
Slide 33: Impact of the City
Impact of the City 2003 2007 93% 89% 7% 11% Other Offices City
Slide 34: The Partnership Grows
The Partnership Grows • 8% growth in 2007 best result since 1999 • IFAs concerned about interplay between TCF, RDR and CAR • Relationship based top-end bancassurers tired of being micro-managed in banking environment • Increased awareness and acceptance of SJP as a proven model and credible alternat
Slide 35: The SJP Academy
The SJP Academy • Intake one trained and ‘live’ • Intake two in training • Intake three in selection and assessment • Intake four will be a ‘succession intake’ (July) • At mid year should have circa 50 individuals in process • Anticipate selected ‘graduates’ moving into Partnership in Q4 2008 • Supp
Slide 36: Mike Wilson, Chairman
ST. JAMES’S PLACE WEALTH MANAGEMENT MIKE WILSON Chairman
Slide 37: Our Competitive Advantage
Our Competitive Advantage • Manufacturer and distributor • Investment Management Approach • St. James’s Place Partnership
Slide 38: St. James's Place Wealth Management
_ ST. JAMES’S PLACE WEALTH MANAGEMENT