St. James's Place Plc · LSE:STJ
St. James's Place — FY2024 Earnings Presentation
41 slides from St. James's Place's earnings presentation, Feb 27, 2025
Slide 1: Full Year Results 2024
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Slide 2: Coming up... 2024 summary & programmes of work
Coming up... 12024 summary 2 3 & programmes Financial Our of work results strategy
Slide 3: Coming up... 2024 summary & programmes of work
Coming up... 12024 summary 2 3 & programmes Financial Our of work results strategy
Slide 4: 2024 summary
2024 summary £18.4bn Gross inflows £190.2bn Funds under management (FUM) 2023: £15.4bn 31 December 2023: £168.2bn £4.3bn Net inflows 94.5% FUM retention rate 2023: £5.1bn 2023: 95.3% £17.7bn Investment return £447.2m Underlying post-tax cash result 2023: £14.7bn 2023: £392.4m 4
Slide 5: Implementing simple, comparable charges: good progress achieved
Good progress achieved Implementing simple, comparable charges ◆ Well advanced with IT build, and working through an extensive testing plan ◆ Equipping our advisers with supporting tools, literature and training On track with previous guidance ◆ New structure expected to be implemented by H2 2025 ◆
Slide 6: Benefits of simple, comparable charges
Benefits of simple, comparable charges Comparability ◆ Improved transparency for clients Clear ◆ Supports clear articulation of value Simplicity articulation provided by each element of our service of value ◆ Enables better comparability with other providers ◆ Enhanced ability to demonstrate our inv
Slide 7: Progressing our historic ongoing service evidence review
Progressing our historic ongoing service evidence review ◆ 2024 focus on building IT infrastructure needed to gather and analyse historic servicing records efficiently ◆ Remain comfortable with the Ongoing Service Evidence provision 7
Slide 8: Saving to invest
Saving to invest £ Demand management ◆ Cost and efficiency programme underway Operating model redesign ◆ This programme will create capacity to invest in our strategic initiatives, which will drive future growth Procurement optimisation ◆ Making progress across our five focus areas Technology simpli
Slide 9: Other highlights
Other highlights Building our reputation, promoting financial advice National brand campaign; Real Life Advice research series; client stories; Advice Guidance Boundary Review Delivering for clients through our investment range Polaris now the largest multi-asset fund range in the UK, with over £60b
Slide 10: Coming up... Financial results
Coming up... 12024 summary 2 3 & programmes Financial Our of work results strategy
Slide 11: Summary FY24 financial results
Summary FY24 Underlying post-tax cash result financial results £447.2m (up 14%) Final shareholder returns for 2024 12.00 pence per share dividend £92.6m share buyback IFRS profit after tax EEV NAV per share £398.4m (2023: £9.9m loss) £16.25 (up 15%) 11
Slide 12: Underlying post-tax cash result of £447.2m
Underlying post-tax cash result of £447.2m Underlying post-tax cash result ◆ Increased 27% on 2023 excluding £m short-term charge structure 900 implementation costs 800 Up 27% ◆ Including these costs, 2024 117.4 700 Underlying post-tax cash result 291.7 Up 14% 14% higher YoY 600 2.6 500 59.5 400 Net
Slide 13: Financial strengths
Financial strengths Managing our Solvency Credit rating balance sheet Our Life companies’ Maintained investment We take a prudent solvency ratio remains grade credit rating approach strong ◆ Hold assets to fully match Fitch credit rating: Life companies’ our obligations to clients A solvency ratio 2
Slide 14: Key programmes of work
Key programmes of work Simple and Historic ongoing Cost and comparable service evidence efficiency charging review programme ◆ 2024 implementation costs ◆ Remain comfortable with ◆ No material net £12m (post-tax) lower than the provision impact in 2024, as guidance guided ◆ These costs have been ◆ E
Slide 15: My perspectives on our financial model
My perspectives on our financial model High degree of visibility of future income growth 1 Simple and disciplined approach to capital allocation 2 15
Slide 16: Financial business model
Financial business model Key profit drivers are annual product management Gross inflows for most Gross inflows for unit charges on FUM investment bond and trust, ISA and DFM pension business 6 business As FUM grows, these charges years grow Complicated under our current charging structure by B
Slide 17: Highly cash generative: Gestation
Highly cash generative: Gestation £683.6m £388.1m Additional income Additional income 2018 net income Investment Lapses Other 2024 net income from maturing from new business not from FUM return from FUM gestation FUM going into gestation Waterfall gives an illustration of the growth drivers The bigg
Slide 18: Powerful picture of income growth
Powerful picture of income growth Gestation New charging FUM at point of structure where charging structure we benefit from all £50.1bn of gestation FUM at charges applying transition 31 December 2024 from day 1 ◆ Will mature over the next 6 years ◆ Once all mature, could generate around £290m addit
Slide 19: Capital allocation framework
Capital How we will prioritise our resources allocation We will ensure the safety of our client investments by: framework Maintain 1 a strong balance sheet Meeting all regulatory solvency, working capital and liquidity requirements as the business grows Maintaining an investment grade credit rat
Slide 20: Capital allocation framework
Capital How we will prioritise our resources allocation We will ensure the safety of our client investments by: framework Maintain 1 a strong balance sheet Meeting all regulatory solvency, working capital and liquidity requirements as the business grows Maintaining an investment grade credit rat
Slide 21: Capital allocation framework
Capital How we will prioritise our resources allocation We will ensure the safety of our client investments by: framework Maintain 1 a strong balance sheet Meeting all regulatory solvency, working capital and liquidity requirements as the business grows Maintaining an investment grade credit rat
Slide 22: Business Sale and Purchase (BSP) scheme
Business Sale and Advisers can realise the value of their businesses through our Purchase (BSP) scheme succession proposition Stakeholder benefits of the scheme: ◆ Supports the delivery of good client outcomes as they receive continuity of service within the SJP ecosystem ◆ Makes SJP a great place f
Slide 23: Funding our business loans to Partners
Funding our business loans to Partners ◆ We originate and initially underwrite all loans Loan book funding at 31 December 2024 100% ◆ Over time we have successfully diversified loan funding ◆ Loan sales 43% ◆ Non-recourse securitisation ◆ External funding facilities direct to Partners 19% Nearly 60%
Slide 24: Capital allocation framework
Capital How we will prioritise our resources allocation We will ensure the safety of our client investments by: framework Maintain 1 a strong balance sheet Meeting all regulatory solvency, working capital and liquidity requirements as the business grows Maintaining an investment grade credit rat
Slide 25: Shareholder returns
Shareholder returns Final shareholder returns comprise: ◆ 12.00 pence per share dividend ◆ £92.6m share buyback Full year shareholder returns of £223.6m, equivalent to 50% of the 2024 Underlying cash result, in line with guidance 25
Slide 26: Capital allocation framework
Capital How we will prioritise our resources allocation We will ensure the safety of our client investments by: framework Maintain 1 a strong balance sheet Meeting all regulatory solvency, working capital and liquidity requirements as the business grows Maintaining an investment grade credit rat
Slide 27: Summary FY24 financial results
Summary FY24 Underlying post-tax cash result financial results £447.2m (up 14%) Final shareholder returns for 2024 12.00 pence per share dividend £92.6m share buyback IFRS profit after tax EEV NAV per share £398.4m (2023: £9.9m loss) £16.25 (up 15%) 27
Slide 28: Coming up... Our strategy
Coming up... 12024 summary 2 3 & programmes Financial Our of work results strategy
Slide 29: The £3.3 trillion UK wealth management market: growing across all segments
The £3.3 trillion UK wealth management market: growing across all segments UK wealth market: by AUM segment UK wealth market: forecast development of AUM 2018-2030 2018-2030 Forecast Forecast £’tn £’tn 6 6 5 5 4 4 3 3 2 2 1 1 0 0 2018 2023 2030 2018 Outflows 2023 Outflows 2030 AUM AUM AUM Gross Asse
Slide 30: The UK financial advice and savings landscape
30 The UK financial advice and savings landscape Ongoing and growing demand for advice, driven by: ◆ Growing advice and savings gap, with many individuals under-invested ◆ Decline in defined benefit pension schemes and the complexity of pension and taxation rules ◆ Large range of investment products
Slide 31: Our strategy
Our strategy OUR PURPOSE To empower clients with invaluable advice to realise bolder ambitions OUR STRATEGIC FOCUS AREAS Differentiated Leading Performance Brilliant Client Adviser Focused Basics Proposition Offering Organisation Simplify and standardise Drive empowerment, Enhance our client Continu
Slide 32: Our strategic ambitions
Adviser advocacy Our strategic ambitions Leading adviser advocacy What success could look like Colleague advocacy High-performing, empowered and engaged colleagues Great client outcomes c.95% annual client retention FUM growth Mid-to-high single digit annual FUM growth Cash result growth Doubling th
Slide 33: SJP – positioning for further success
SJP – positioning for further success Established Positioned to Sustainable Well-placed for Highly cash market leader benefit from and effective earnings growth generative, operating with structural market asset gathering as we deliver supporting growth scale advantage growth model scale operating a
Slide 34: Appendices
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Slide 35: IFRS and EEV
IFRS and EEV IFRS profit after tax up, reflecting similar EEV NAV per share up 15%, reflecting: dynamics to Cash result ◆ EEV operating profit in the period ◆ Distorted by policyholder tax ◆ Strong investment performance ◆ Loss in 2023 due to recognising the Ongoing Service Evidence provision IFRS p
Slide 36: 2025 guidance summary
2025 Net income from FUM margin range: Growth in controllable expenses budgeted at 5% guidance ◆ 54 to 56 bps on mature with no material net impact from the cost and efficiency FUM, excluding DFM and summary Asia prior to programme for the year implementation of our new charging structure ◆ 43 to 45
Slide 37: Cash result: other lines
Cash result: other lines Reduced investment in Asia following prior year restructuring £’million 2024 2023 Reduced investment in DFM through disciplined expense Net investment in Asia (10.2) (19.4) control Net investment in DFM (2.4) (6.4) FSCS levy remained low in 2024 as it was in 2023, due to a s
Slide 38: Our simple, comparable charging structure
Our simple, comparable charging structure Initial charges Ongoing charges Ongoing charges The same across all ISAs and unit trusts Investment bonds and products pensions 1.59% 1.67% 1 – 3% 0.80% 0.80% 1 1 0.52% Tiered based on 0.52% investment size and with flexibility in certain 0.27% 2 0.35% 2 cir
Slide 39: Our simple, comparable charging structure
Our simple, comparable charging structure Initial advice charge tiering: Ongoing product charge tiering: Initial advice Investment bonds and Ongoing product Consolidated case size charge pensions charge First £250k 3% First £500k 0.35% Next £250k 2% Next £500k 0.32% Amount over £500k 1% Next £1m 0.2
Slide 40: Modelling guidance for cost and efficiency and investment programmes
Modelling guidance for cost and efficiency and investment programmes £’million 2024 2025 2026 2027 2028 2029 2030 Total Cost savings net of 01 30 55 95 100 100 100 480 costs to achieve Investment for Nil (30) (55) (65) (50) (30) (30) (260) growth Net impact on cost 0 0 0 30 50 70 70 220 base (before
Slide 41: Polaris - Cumulative Performance
Polaris 1 - Cumulative Performance Polaris 2 - Cumulative Performance (Unit Trust/ISA) (Unit Trust/ISA) Polaris: the UK’s 20% 25% fastest growing 15% 20% multi-asset fund 15% 10% 10% range 5% 5% 0% 0% -5% -5% £60.5bn Total Polaris FUM Polaris 1 ARC Sterling Cautious PCI Polaris 2 ARC Sterling Balanc