St. James's Place Plc · LSE:STJ
St. James's Place — H1 2008 Earnings Presentation
35 slides from St. James's Place's earnings presentation, Jul 29, 2008
Slide 1: Interim Results
ST. JAMES’S PLACE WEALTH MANAGEMENT INTERIM RESULTS July 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: Mike Wilson, Chairman
ST. JAMES’S PLACE WEALTH MANAGEMENT MIKE WILSON Chairman
Slide 4: Agenda
Agenda Introduction MIKE WILSON Financials ANDREW CROFT Business update DAVID BELLAMY Summary MIKE WILSON
Slide 5: Andrew Croft, Finance Director
ANDREW CROFT Finance Director
Slide 6: Analysis of Pre-Tax Result
Analysis of Pre-Tax Result £’m 2008 2007 Underlying operating profit 114.2 111.8 One off tax benefit - 8.9 114.2 120.7 Investment variance (175.7) 24.3 Economic assumption change (0.5) (11.4) Pre-tax result (62.0) 133.6
Slide 7: Investment Variance
Investment Variance • Heavy falls in world stock markets in first six months (e.g. FTSE 100 down 12.9%) • Actual return more than 12% below assumed rate • This is a short term time period • Looking at variance over the last five years the actual increase in our funds has exceeded the assumption by 1
Slide 8: Analysis of Operating Profit
Analysis of Operating Profit £’m 2008 2007 New business contribution 65.3 71.5 Profits from existing business –expected 51.4 43.6 –experience variance 1.0 6.3 –operating assumption changes - (0.2) Investment income 4.0 3.5 Life & unit trust operating profit 121.7 124.7 Share option expense (9.0) (5.
Slide 9: Margin
Margin • Margin is still strong • Manufactured business 84% compared with 88% • Increased proportion of pension business • Expense gearing
Slide 10: Analysis of Operating Profit
Analysis of Operating Profit £’m 2008 2007 New business contribution 65.3 71.5 Profits from existing business –expected 51.4 43.6 –experience variance 1.0 6.3 –operating assumption changes - (0.2) Investment income 4.0 3.5 Life & unit trust operating profit 121.7 124.7 Share option expense (9.0) (5.
Slide 11: Movement in Funds Under Management
Movement in Funds Under Management £’bn HY 2008 FY 2007 Opening funds under management 18.2 15.4 New money invested 1.5 3.1 Investment return (1.8) 0.9 17.9 19.4 Regular income (0.2) (0.3) withdrawals / maturities Surrender / part surrenders (0.5) (0.9) Closing funds under management 17.2 18.2 Impli
Slide 12: Analysis of Operating Profit
Analysis of Operating Profit £’m 2008 2007 New business contribution 65.3 71.5 Profits from existing business –expected 51.4 43.6 –experience variance 1.0 6.3 –operating assumption changes - (0.2) Investment income 4.0 3.5 Life & unit trust operating profit 121.7 124.7 Share option expense (9.0) (5.
Slide 13: Movement in Net Asset Value per share
Movement in Net Asset Value per share as at 30 June Pence 2008 2007 Opening net asset value per share 252.5 222.6 Increase from operations 18.9 19.2 Investment income 271.4 241.8 Decrease/increase from market & (29.2) 2.1 economic assumption changes Change in tax rate - 4.2 Payment of dividend (2.6)
Slide 14: Analysis of Adjusted Post Tax Cashflow
Analysis of Adjusted Post Tax Cashflow £’m 2008 2007 Net annual management fee 66.4 60.3 Unwind of surrender penalties (27.3) (21.8) Loss/profit arising on new business (6.5) (4.7) Establishment expenses (35.7) (32.5) Investment income 4.9 4.5 Miscellaneous 10.4 7.3 Underlying cash flow 12.2 13.1
Slide 15: Analysis of Adjusted Post Tax Cashflow (cont'd)
Analysis of Adjusted Post Tax Cashflow (cont’d) £’m 2008 2007 Arising on in force business 48.6 44.4 +10% Arising from new business (36.4) (31.3) 12.2 13.1
Slide 16: Dividend
Dividend Interim dividend 1.84 pence up 5%
Slide 17: Capital Position as at 30 June 2008
Capital Position as at 30 June 2008 Other £’m Life Regulated Other Total Solvency position Solvency net assets 142.9 28.4 80.5 251.8 Solvency requirement 38.0 14.6 Solvency ratio 376% 195%
Slide 18: Capital Position as at 30 June 2008 (cont'd)
Capital Position as at 30 June 2008 (cont’d) Other £’m Life Regulated Other Total Analysis of solvency net assets UK Govt. backed debt 19.1 - - 19.1 Other Govt. backed debt 24.6 - - 24.6 AAA rated money market funds 120.1 - 18.0 138.1 Bank balances 43.0 57.1 13.0 113.1 Fixed assets - - 9.9 9.9 Actua
Slide 19: David Bellamy, Chief Executive
DAVID BELLAMY Chief Executive
Slide 20: New Business Results
New Business Results • Quarter 2 up +5% (APE) • Best ever quarter • Year to date +3%
Slide 21: New Business Results
New Business Results • Onshore & Offshore Bonds 11% lower • Pensions up 15% (+21% for Q2) • Unit Trusts 8% lower • ISA sales up 4% • Total business up 3%
Slide 22: New Business Results
New Business Results • New single investments £1.7bn • Underlying retention rate of 95% • Funds under Management £17.2bn • Further Funds under Advice £1.6bn
Slide 23: Funds Under Management
Funds Under Management (£bn) 25%p.a. compound growth over the last 5 years and 23%p.a. over 10 years +18% +25% +29% +20% +34% +24% +10% -6% +47% +31% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 £17.2bn as at 30 June 2008
Slide 24: Distribution of Client FuM
Distribution of Client FuM 5% 1% 12% 3% 4% 18% 25% 9% Overseas Clients 4%
Slide 25: Geographic Distribution of Partners
Geographic Distribution of Partners 6% 2% 15% 3% 4% 12% 25% 11%
Slide 26: Partners and Client FuM
Partners Client FuM 6% 5% 2% 1% 15% 12% 3% 4% 3% 4% 4% 12% 18% 25% 25% 11% 25% 11% Overseas Clients 4%
Slide 27: St. James's Place Partnership
St. James’s Place Partnership • Partner numbers • up 3.2% YTD to 1291 • up 8.8% since last June • Academy pilot progressing well
Slide 28: Winner - Investors Chronicle Awards 2008
WINNER ST JAMES'S PLACE WEALTH MANAGEMENT INVESTORS bh [oe CHRONICLE Terre ere re mereermereree ert rre iol AWARDS 2008
Slide 29: Award winning wealth management
Award winning wealth management... ...as voted by our clients. WINNER ST. JAMES'S PLACE WEALTH MANAGEMENT INVESTORS CHRONICLE % TMS, AWARDS 2008 Winner The Daily Telegraph Wealth Manager of the Year 2007 Winner Best financial adviser Consumer Finance Awards 2005 theguardian The Observer GuardianUnim
Slide 30: Strength of relationships
Strength of relationships • 75% new business from clients and referrals • 95% retention of Funds under Management
Slide 31: New Initiatives
New Initiatives • Cash Unit Trusts • New Corporate Bond Fund mandate • Invesco Perpetual • Alternative Asset Fund • Access to Hedge Funds • Monaco/Spain
Slide 32: Summary
Summary • New Business of £220.7m (up 3%) • Highest ever quarter • Group operating profit at £114.2m • Partnership numbers at 1291 (up 3.2%) • Investing for the future
Slide 33: Mike Wilson, Chairman
ST. JAMES’S PLACE WEALTH MANAGEMENT MIKE WILSON Chairman
Slide 34: St. James's Place Wealth Management
_ ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 35: Slide 35