August 1, 2018 / 6:38 AM / in 2 years

St. James's Place first-half flows lag forecasts, shares dip

LONDON (Reuters) - British wealth manager St James’s Place’s (SJP.L) net flows and total cash fell short of forecasts in the first half, crimped by modest market returns and the cost of upgrading the firm’s technology, sending its shares lower.

Shares were down 1.7 percent at 0819 GMT, putting the company among the top fallers on the blue-chip FTSE 100 .FTSE.

The miss on net flows and total cash took the shine off otherwise strong results.

SJP, which offers a range of investment and insurance services, said it continued to see growing demand from affluent clients, particularly after rule changes in recent years that have given them more control over how they save for retirement.

“The market is large and continues to grow,” Chief Executive Andrew Croft told Reuters, with more savers looking for face-to-face advice to help them better manage their money and, increasingly, to pass it on to the next generation.

Net inflows were 5.2 billion pounds in the six months to end June, lagging consensus forecasts by around 2 percent. The improvement from 4.3 billion pounds a year earlier was helped by increased demand for its pension services, which helped take total assets to 96.6 billion pounds.

The company’s total cash result missed by 3 percent, analysts said, as the company continued to fund a major technology upgrade, dubbed ‘BlueDoor’.

“Total cash earnings and net flows came in modestly behind consensus,” Bernstein analyst Edward Houghton said in a note to clients.

“Overall, no big surprises either way, but we’ll be looking out for details on remaining costs to implement BlueDoor and any potential benefits.”

Operating profit on a European embedded value basis, which discounts future cashflows and is one of the main gauges of performance, rose 23 percent to 489.6 million pounds, up from 397.3 million pounds a year earlier.

The underlying cash on hand also rose strongly, up 20 percent to 147.1 million pounds, helping underpin a 20 percent increase in the interim dividend to 18.49 pence a share.

Reporting by Simon Jessop; Editing by Sinead Cruise and Jan Harvey

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