St. James's Place Plc · LSE:STJ
St. James's Place — FY2008 Earnings Presentation
45 slides from St. James's Place's earnings presentation, February 2009
Slide 1: Preliminary Results
PRELIMINARY RESULTS February 2009
Slide 2: Mike Wilson, Chairman
ST. JAMES’S PLACE WEALTH MANAGEMENT MIKE WILSON Chairman
Slide 3: Presenting team
Mike Wilson CHAIRMAN David Bellamy CHIEF EXECUTIVE Andrew Croft FINANCE DIRECTOR Ian Gascoigne SALES DIRECTOR David Lamb BUSINESS DEVELOPMENT DIRECTOR
Slide 4: Agenda
Agenda Introduction MIKE WILSON Business Update DAVID BELLAMY Financials ANDREW CROFT Outlook DAVID BELLAMY Q&A
Slide 5: David Bellamy, Chief Executive
DAVID BELLAMY Chief Executive
Slide 6: Market falls: FTSE, banking, world stock markets
• FTSE 100 31% • Banking Sector 60% • World Stock Markets 20% - 75% • Interest Rates 60%
Slide 7: New Business by Quarter
New Business by Quarter APE (Annual premiums plus 10% of single premiums) - £m 2006 over 2005 +57% +54% +63% +59% 2007 over 2006 +41% +26% +20% +10% 2008 over 2007 +1% +5% +0% -15%
Slide 8: Investment new business by quarter
Investment new business by quarter Single premiums 2006 over 2005 +71% +47% +49% +36% 2007 over 2006 +22% +39% +30% +16% 2008 over 2007 -4% -4% -20% -24%
Slide 9: Pensions new business by quarter
Pensions new business by quarter Single premiums 2006 over 2005 +83% +78% +106% +147% 2007 over 2006 +105% +52% +27% -4% 2008 over 2007 +9% +10% +19% -3%
Slide 10: Funds Under Management (£bn)
Funds Under Management (£bn) 16% p.a. compound growth over the last 5 years and 18% p.a. over 10 years
Slide 11: Number of Partners
ST. JAMES’S PLACE WEALTH MANAGEMENT Number of Partners
Slide 12: Andrew Croft, Finance Director
ANDREW CROFT Finance Director
Slide 13: Analysis of Operating Profit
Analysis of Operating Profit £’m 2008 2007 New business contribution 123.5 150.9 Profits from existing business –expected 80.5 77.7 –experience variance 16.9 16.2 –operating assumption changes (0.9) (2.8) Investment income 4.9 6.9 Total Life/Pension & unit trust 224.9 248.9 Other (20.6) (4.2) Operat
Slide 14: New Business Contributions
New Business Contributions £’m 2008 2007 Gross margin 250.2 272.8 (8%) Direct expenses (126.7) (121.9) 4% 123.5 150.9 (18%)
Slide 15: New Business Contributions 2008 vs 2003
New Business Contributions £’m 2008 2003 Gross margin 250.2 100.7 +148% Direct expenses (126.7) (75.7) +67% 123.5 25.0 +394%
Slide 16: Analysis of Operating Profit
Analysis of Operating Profit £’m 2008 2007 New business contribution 123.5 150.9 Profits from existing business –expected 80.5 77.7 –experience variance 16.9 16.2 –operating assumption changes (0.9) (2.8) Investment income 4.9 6.9 Total Life/Pension & unit trust 224.9 248.9 Other (20.6) (4.2) Operat
Slide 17: Pre-Tax EEV Profit
Pre-Tax EEV Profit £’m 2008 2007 Total operating profit 204.3 244.7 Investment variance (320.6) (14.5) Economic changes 0.4 0.2 Pre-tax results (115.9) 230.4
Slide 18: Investment Variance
Investment Variance • Reflects the capitalised impact of the revised future profit expectation • But not all funds invested in equities • Benefit from fall in strength of sterling • Our funds outperformed
Slide 19: Pre-Tax EEV Profit
Pre-Tax EEV Profit £’m 2008 2007 Total operating profit 204.3 244.7 Investment variance (320.6) (14.5) Economic changes 0.4 0.2 Pre-tax results (115.9) 230.4
Slide 20: Net Asset Value per Share
Net Asset Value per Share Net asset value 232.4p (2007 : 252.5p)
Slide 21: MCEV
ST. JAMES’S PLACE WEALTH MANAGEMENT MCEV
Slide 22: IFRS Result
IFRS Result 2008 2007 Profit before shareholder tax 80.7m 96.1m Profit after shareholder tax 67.1m 78.1m Net asset value per share 105.9p 92.9p
Slide 23: Analysis of Post Tax Cashflow
Analysis of Post Tax Cashflow £’m 2008 2007 Arising on in force business 91.4 84.7 Arising from new business (67.3) (58.8) Underlying cash result 24.1 25.9 One offs - 7.2 24.1 33.1
Slide 24: Dividend
Dividend • Interim dividend 1.84 pence up 5% • Maintained final dividend at 2.55 pence • Full year dividend 4.39 pence up 2.1%
Slide 25: Capital Position as at December 2008
Capital Position as at 31 December 2008 Other £’m Life Regulated Other Total Solvency position Solvency net assets 151.9 19.3 88.8 260.0 Solvency requirement 41.1 14.6 Solvency ratio 370% 132%
Slide 26: David Bellamy, Chief Executive
DAVID BELLAMY Chief Executive
Slide 27: St. James's Place
St. James’s Place • Leading UK Wealth Management company • Differentiated business model • Own dedicated distribution – the Partnership • Distinct investment management approach • Manufacturer and distributor • High brand recognition for trusted advice • 286,000 clients • Funds under management £16.
Slide 28: External Endorsement
External Endorsement Sector winner - 2008
Slide 29: Delivering Growth
Delivering Growth Target 15 – 20% pa New Business Capacity Productivity No of Partners New Business Per Partner But also resilient in more difficult times
Slide 30: Dedicated distribution
Dedicated distribution • High quality wealth management team • Average experience 17 years • 97% per annum retention rate • No partner accounts for more than 1% APE • Initiatives to grow partner numbers • Dedicated acquisition team • Academy • Take advantage of current economic circumstances
Slide 31: Growing Number of Partners
ST. JAMES’S PLACE WEALTH MANAGEMENT Growing Number of Partners
Slide 32: Average APE per Partner (£k)
ST. JAMES’S PLACE WEALTH MANAGEMENT Average APE per Partner (£k)
Slide 33: Broad Geographical Distribution
Broad Geographical Distribution 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 34: Distinct Investment Management Approach
Distinct Investment Management Approach • No in-house investment managers which means no conflicts of interest • Investment Committee with Stamford Associates advice • Ability to appoint the best fund managers with wholesale purchasing power • Continuous monitoring plus quarterly reviews • Facility
Slide 35: Relative investment performance
Relative investment performance Funds under Management - Rolling 5 years
Slide 36: External Investment Managers - 2003
External Investment Managers - 2003 Core Managers – Managed Funds Specialist Managers • THSP • Invesco Perpetual – Neil Woodford • Invesco Perpetual - Neil Woodford • Aberdeen – Andrew Preston, Hugh Young • GAM – Andrew Green • Wellington – Louis Chabier, Haluk Soykan • Schroder – Ted Williams • Ban
Slide 37: External Investment Managers - 2009
External Investment Managers - 2009 Core Managers – Managed Funds Specialist Managers • THSP • Invesco Perpetual – Neil Woodford Paul Read, • Invesco Perpetual - Neil Woodford Paul Causer • GAM – Andrew Green • Aberdeen – Andrew Preston, Hugh Young • Schroder – Nick Purves • Wellington – Louis Chabi
Slide 38: Simple and Safe
Simple and Safe • No with profits • No guaranteed annuity options • No longevity risk • No split level trusts • No derivative-based “precipice” funds • No mortgages / sub prime
Slide 39: Responsive Fund Range
Responsive Fund Range • 2008 • Alternative Asset Fund - BGI • High Octane Fund - Oldfield/Thornburg • Cash Unit Trust - State Street • 2009 • Corporate Bond Fund - Invesco Perpetual • (Investment Grade) • Gilt Unit Trust - Wellington • Income Unit Trust - Axa Framlington
Slide 40: New business
New business Target 15 to 20% pa (18% compound growth since inception and 23% over the last 5 years) APE (Annual premiums plus 10% of single premiums)
Slide 41: Funds Under Management (£bn)
Funds Under Management (£bn) 28% compound growth since inception and 16% over the last 5 years
Slide 42: Current Environment
Current Environment • Investment markets under real pressure BUT • Growing need for advice • Wealth preservation • Planning for retirement still a priority
Slide 43: Pension provision trends
• Average pension fund for 50-65 year olds = £150,000 (£8K pa) • 50% of Final Salary Schemes will close • 25% of Final Salary Schemes will change • Public sector pension schemes also unsustainable
Slide 44: Outlook
Outlook • Dedicated advisor-led approach • Partnership growing whilst competition shrinking • Strong record on retention • Growing maturity of in-force book • Strong solvency position • Focused business model St. James’s Place uniquely positioned
Slide 45: St. James's Place Wealth Management
ST. JAMES’S PLACE WEALTH MANAGEMENT