INTERIM RESULTS August 2018

Transcription

1 INTERIM RESULTS August 2018

2 ANDREW CROFT Chief Executive

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4 Market is large and growing UK individuals with between 50k and 5m of investable wealth 9,638 10,112 10,559 11,046 11,496 11,952 12,393 Considerable savings gap Growing need and demand for advice Advice gap PERFECT ENVIRONMENT FOR SJP 50,000 40,000 30,000 20,000 10, E 2017 E 2018 F 2019 F 2020 F 2021 F E = Estimated F = Forecasts Source: Global Data, January 2018 Number of Advisers Source: APFA/FSA/FCA Bank Advisers Financial Advisers DFM/Stockbrokers Other Firms

5 The Partnership: Delivering Face to Face Advice c.2,450 Partner businesses c.3,800 qualified advisers Average age is 47 Average industry experience is 19 years Above average productivity 90%+ per annum retention c5,500 Partner support staff Supported by 1,700 employees 2,000 dedicated back office staff

6 The Partnership: Delivering Face to Face Advice Focused on developing long-term client relationships that span generations Highly personalised, face-to-face advice and service that clients truly value Supervision and support from a well capitalised FTSE 100 business: Quality assurance and guaranteed advice Access to specialist technical and compliance professionals Due diligence embedded within our investment proposition

7 Net Inflows up 21% to 5.2bn

8 Agenda Financial Performance Craig Gentle Partnership Update Ian Gascoigne Q&A

9 David Lamb

10 Rob Gardner

11 CRAIG GENTLE Chief Financial Officer

12 Agenda Adviser growth and new business The cash result The embedded value result Solvency and dividends

13 Adviser growth Up 4% YTD to 3, % +10% +10% +7% +4%

14 Gross inflows 16bn Up 15% to 7.9bn 12bn 8bn +15% 4bn 0bn H1 H2

15 Net inflows 10bn Up 21% to 5.2bn 8bn 6bn +21% 4bn 2bn 0bn H1 H2

16 Funds under management Up 6% YTD to 96.6bn 100bn +10% +6% 80bn +28% bn 40bn 20bn +18% -10% +31% +26% +6% +22% +27% +17% +13% 0bn H1 2018

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18 Operating cash result +12% 332.5m (144.4)m 70.0m Growth in FUM drives increase in net annual management fees Increase in margin arising from new business reflects new business growth, mix, and Bluedoor scale benefits 164.3m Net annual management fee Reduction in fees in gestation period Margin arising from new business Expenses Shareholder interest and tax relief from capital losses Miscellaneous Operating cash result

19 Emergence of cash from FUM in gestation Year FUM ( bn) Post-tax cash ( million) Half year FUM in gestation now stands at 33.1 billion As each cohort emerges from gestation, it will begin to contribute to the cash result In total, the current stock of gestation FUM would contribute an additional million per annum of net income

20 Operating cash result +12% 332.5m (144.4)m 70.0m (106.4)m 19.4m (6.8)m 164.3m Growth in FUM drives increase in net annual management fees Increase in margin arising from new business reflects new business growth, mix, and Bluedoor scale benefits Expenses in line with expectation; lower FSCS levy reflects one-off nine month billing period Net annual management fee Reduction in fees in gestation period Margin arising from new business Expenses Shareholder interest and tax relief from capital losses Miscellaneous Operating cash result Operating cash result +18%

21 Cash result m H H Operating cash result Academy (4.2) (3.3) Asia (6.0) (7.5) DFM (4.5) (2.8) Strategic development costs (2.5) (2.3) Underlying cash result Back-office infrastructure development (15.2) (8.2) Variance (3.2) (3.6) Cash result Academy continues to build scale and contribute strongly Asia and Rowan Dartington are on track, with additional income matching additional long-term investment Underlying cash result up 20% Back-office infrastructure costs include dual-running expenses as we achieve further migration milestones

22 Bluedoor Pensions drawdown plans successfully migrated in H1 Over 38,000 client drawdown plans migrated Over 5.3bn of drawdown FUM C.40% of Group funds under management now on Bluedoor Over 70% of new business now being placed on Bluedoor Expect migration activity to be largely complete by end-2019

23 EEV operating profit +27% 124m (0.4)m 2.5m (20.5)m (18.8)m (34.2)m +23% New business profit reflects growth in inflows and EV benefit from Retirement Account 437m 489.6m EEV operating profit up 23% New business contribution Unwind of the discount rate Experience variance Investment income Distribution business Back office infrastructure development Other EEV operating profit

24 EEV operating profit (32.5)m 6.0m NAV per share m 463.1m EEV operating profit Investment return variance Economic assumption changes EEV profit before tax

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26 Combined Life Company Solvency Position m 30 June Dec June 2017 Solvency II net assets * * Management Solvency Buffer (MSB) Management solvency ratio 126% 101% 142% Given the relative simplicity of our business, solvency is managed on the basis of holding assets to match client unit-linked liabilities plus the MSB Solvency position remains strong * Before payment of Group interim dividend After payment of year end Group final dividend

27 Dividends Interim dividend up 20% to 18.49p Expect to distribute 80% of full year underlying cash result

28 Summary Total adviser numbers 3,810, up 4% Gross inflows 7.9bn, up 15%; Net inflows 5.2bn, up 21% Funds under management 96.6bn, up 6% YTD EEV operating profit 489.6m, up 23% Underlying cash result 147.1m, up 20% Interim dividend 18.49p, up 20%

29 IAN GASCOIGNE Managing Director

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31 Growth Model CAPACITY Number of Advisers V PRODUCTIVITY Average New Business per Adviser NEW BUSINESS

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34 The Hadlow Edwards Practice FOUNDERS Warren Hadlow Director Medwyn Edwards Director

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36 The Hadlow Edwards Practice DIRECTORS Warren Hadlow Director James Parry Adviser/ Director Medwyn Edwards Director

37 The Hadlow Edwards Practice ADVISERS Tom Hadlow Age 29 Aberystwyth University Gwyn Edwards* Age 28 Loughborough University Ben Gittins Age 26 Manchester University Howard Ellett Age 60 Former SJP Partner * Chartered Chartered & Fellow

38 The Hadlow Edwards Practice DIRECTORS ADVISERS

39 The Hadlow Edwards Practice DIRECTORS ADVISERS PARAPLANNERS

40 The Hadlow Edwards Practice DIRECTORS ADVISERS Dom Richmond Operations Director PARAPLANNERS OPERATIONS

41 Partner Practice Website

42 The Hadlow Edwards Practice DIRECTORS ADVISERS Dom Richmond Operations Director PARAPLANNERS OPERATIONS

43 Partner Support Business Acquisition Transition Business Processing Establishment Development Risk Marketing Private Clients Technical Support Business sale & purchase Technology Training & Development Risk

44 Total number of advisers by type of Partner business 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Single Partner Practice Small Business Medium Business Large Business

45 Summary Investment by Partners in their own infrastructure and support The development of the next generation of advisers Client retention through ordered succession Ability for new advisers to buy-in to practices facilitating succession Next generation advisers accessing next generation clients Future orientated

46 Academy ACADEMY % of London New Business from Academy Graduates 26% City 15% Elstree 14% Hamilton Place 16% Kingsway

47 Recruitment Adviser Growth - Up 4% YTD to 3, % +10% +10% +7% +4%

48 Summary Organic growth of Partner businesses Continued and growing contribution of the Academy Continued commitment to recruiting the best individuals in the industry

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50 Partner Websites

51 Client Portal Online Wealth Account Digital offering for clients Daily valuation of investments Multi currency reporting Client specific performance reporting Electronic correspondence/reports Notifications by or text Online Card Payments Phone app

52 Partner Portal My Practice

53 Exposures Asset classes, regions, sectors, charges & yields Portfolios App Potential return ranges Backtested and projected future return ranges, stress testing Explanation of Risks Market and event risks, portfolio diversification Outcome Attributes Degree of outcome present in the portfolio

54 Curo Customer Relationship Management (CRM) Microsoft Dynamics based CRM Integration with SJP systems as well as FE Analytics and Xperido (report writing tool)

55 Voyant Cashflow Planning

56 ibusiness Partner back office

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58 St. James s Place Academy Four Regional Academies (London, Manchester, Solihull & Edinburgh) Over 450 have graduated from the Academy and Next Generation Academy programmes to date with 95 doing so in H In addition, there are currently 329 enrolled in the Academy and Next Generation Academy programmes yet to graduate 18% of 2017 London new business from Academy graduates Typical intake: Average age 37 30% female 62% from non-financial services background (Military, Recruitment, Sport, Marketing, IT)

59 Back-office infrastructure A multi-year investment A cautious approach to implementation Important and necessary Providing capacity and capability for future growth Supporting continued development of Client & Partner Portals

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61 Investment Management Approach Diversified Assets Fund Founded in 1976 by Jerome Kohlberg, Henry Kravis and George Roberts AUM as at 31 Mar 18 was $176bn Global investment firm with offices in 20 cities across 14 countries Saleena Goel Aidan T. Corcoran

62 Investment Management Approach Sustainable and Responsible Equity Fund Founded in 1998 AUM as at 31 Mar 18 was 11bn Offices in US, UK and Hong Kong David Winborne Kirsteen Morrison

63 Investment Management Approach

64 Client Offering

65 Client Offering

66 Client Offering

67 Asia Gross inflows up 51% Net inflows up 47% Funds under Management over 550m up 32% since end of 2017 Launch of International DFM service in Hong Kong

68 Rowan Dartington 2.3bn Funds under Management Almost doubled since acquisition in 2016 Number of Investment Executives up from 46 to 51

69 Rowan Dartington Funds under Management ( bn) 2.5bn 2.0bn % 25% 1.5bn % 15% 1.0bn 10% 0.5bn 5% 0.0bn 0% Total FUM Introduced by SJP Partners

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71 Summary Challenges facing individuals are considerable Growing demand for trusted face to face financial advice and support An advice gap exists Continued investment from both Partners and St. James s Place ensure the business is well-placed for future growth Confident in our ability to grow in line with our stated medium term objectives

72 Summary Strong balance sheet Growing income Growing return to shareholders 20% increase in interim dividend

73 Summary Total adviser numbers 3,810, up 4% Gross inflows 7.9bn, up 15%; Net inflows 5.2bn, up 21% Funds under management 96.6bn, up 6% YTD EEV operating profit 489.6m, up 23% Underlying cash result 147.1m, up 19% Interim dividend 18.49p, up 20%

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