LONDON (Reuters) - Growing demand for face-to-face financial advice helped British wealth manager St James’s Place beat full-year forecasts across the board on Wednesday, sending its shares higher.
SJP offers a range of financial services to wealthier clients and has benefited from British rule changes in recent years that make it easier for clients to access pension savings, in turn fuelling demand for help in managing the money.
As previously reported, total funds under management rose to a record 90.7 billion pounds last year, helped by strong demand for its pension and savings services and underpinning a strong set of financial results.
Operating profits on a European embedded value (EEV) basis, which discounts future cashflows and is one of the main gauges of performance, rose 36 percent to 918.5 million pounds, up from 673.6 million pounds in 2016.
That beat a company supplied analyst consensus forecast for 845.5 million pounds, as did the company’s cash generation and dividend payout.
“We see a growing market, a growing demand for advice. There’s an advice gap which we are uniquely placed to fill,” Chief Executive Andrew Croft told Reuters.
In response, shares in St James’s Place were among the best-performing among UK blue-chips, up 2.9 percent to 1,159 pence a share at 0830 GMT in a 0.5 percent weaker FTSE 100.
Underlying cash after tax came in at 281.2 million pounds, beating analyst consensus for 280.9 million pounds, while the full-year dividend of 42.86 pence a share beat analyst forecasts for 41.1 pence. That represented a payout of 80 percent of underlying cash, a figure the company said it would maintain.
Looking forward, the company said it was confident of meeting its medium-term underlying growth target of 15-20 percent a year.
Numis analyst David McCann upgraded the stock to ‘buy’ from ‘add’ with a target price of 1,430 pence.
“We continue to hold SJP in very high regard and believe it should continue to be a core long term sector holding for many investors.” McCann said.
“We believe that the business will continue to demonstrate that it is one of the most consistent and resilient asset gatherers (and retainers), regardless of the economic conditions,” he said.
Reporting by Simon Jessop; editing by Silvia Aloisi/Keith Weir