St James's Place: First quarter new business update

New business inflows and update on dividend payments

St. James’s Place plc (“SJP”), the wealth management group, today issues an update on new business inflows and funds under management for the three months ended 31 March 2020, as well as an update on dividend payments and the impact of COVID-19 on the business.

Andrew Croft, Chief Executive, commented:

“At the time of our full-year results announcement I commented that improved investor sentiment, following the UK General Election outcome, had driven an increase in activity across the business. This in turn has translated into first quarter gross inflows increasing 12% to £4.04 billion. With retention remaining very strong, net inflows for the period were up 9% at £2.37 billion, representing annualised growth of 8.1% on opening funds under management.

With the escalation of the COVID-19 crisis during March there was a sharp decline in global markets and this negatively impacted our funds under management, which closed the period at £101.7 billion. Given the nature of our unit-linked business model, where we match client liabilities with corresponding assets, our balance sheet is largely protected from these steep market declines and therefore our solvency position remains strong.

Although gross and net flows in April have been robust, albeit below the same month last year, 2020 is shaping up to be another challenging year. Whilst our business is resilient, we are not immune to how the unprecedented level of uncertainty may impact the operating environment for the business and our clients for the foreseeable future. It is therefore imperative that we have the ability and flexibility to continue providing clients with the quality of service they need through the Partnership in scenarios that have the potential to become significantly more challenging.

For this reason, and acknowledging the heightened regulatory sensitivity at this time, the Board has decided to withhold 11.22 pence per share, or around one-third of the proposed 2019 final dividend, until such a time as the financial and economic impacts of COVID-19 become clearer. This prudent judgement will ensure we are able to deal with such scenarios and protect clients, the long-term value of the business, and our proven ability to benefit from the growth opportunity that will undoubtedly emerge on the other side of this crisis. As a result, we will pay 20.0 pence per share as a second 2019 interim dividend on 27 May 2020 to those shareholders on the register as at the close of business on 11 May 2020. In addition, the Board confirms that it will be making one dividend decision relating to the 2020 financial year and this will be made in February 2021 at the time of our full-year results.

We have seen from past crises that if we look after our clients, advisers and employees, as well as our wider community, we will be rewarded in the future with increased goodwill, loyalty and retention. Looking ahead, the fundamental financial planning requirements of individuals remain considerable with the need for trusted financial advice continuing to increase, arguably even faster now given the uncertainty that prevails. At the same time, the availability of high-quality professional financial advice continues to be limited. The strength and resilience of our business model means we are well-positioned to meet the challenges ahead and take advantage of the opportunities for continued growth over the medium term. The ‘can-do’ attitude with which the business has set about tackling the changes that have been forced upon us is a credit to everyone within the St. James’s Place community.”

Further details, including an update on how the business is responding to the COVID-19 crisis, are included below.

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View the full press release (PDF).