St James’s Place bullish on prospects as profit jumps
St James’s Place is targeting more than £200bn in funds under management by the end of 2025 after a surge in profit amid the market recovery.
Funds under management for the year ended 31 December stood at a record £129.3bn compared with £117bn the previous year. Wealth managers have benefited from the market recovery after they suffered record outflows at the peak of the pandemic.
The company is bullish about its growth over the next few years. “Growth on this scale will require continued investment but given the success of our technology initiatives in recent years, we believe overall expense growth can be held to around 5% per annum,” chief executive Andrew Croft said.
Investors are pleased with St James’s Place’s performance and its confident outlook with shares up 0.5 per cent in early trading.
Despite the strong figures the company announced plans to cut 200 jobs as it streamlines its business.
“In the near term, whilst we are encouraged by the moderate growth in new business we have we have seen in the early weeks of 2021, the external environment remains challenging,” Croft said. “There remain difficult months ahead but as COVID-19 restrictions ease, we are hopeful there will be an economic recovery and we will see a return to more normal growth in new client investments.”
The board has proposed a final dividend for 2020 of 38.49 pence per share, equivalent to 80 per cent of underlying cash, down from the 2019 level of 49.71 pence and consensus of 42.0 pence.
It’s not all bad news for shareholders though. St James’s Place is now paying the withheld 2019 final dividend of 11.22 pence, bringing the total dividend paid to 49.71 pence.
Shore Capital analysts said the results “demonstrate that SJP navigated the crisis well, and the company remains a growth stock in a growth sector that can deliver 10%+ AUM and dividend growth over time”.